Hi, is trading212 interested in providing similar to like M1 borrow which allows you to directly take out a loan / borrow money to invest for the long-term?
Interesting. Probably not anytime soon though, but you might be interested in the leveraged shares on the invest platform. Usually 2x though
How can you leverage in the invest section? are we talking about stocks or other instruments?
they mostly work like ETFs
ie 3LGO.L is
Wisdom Tree 3 x Leveraged long gold
You only buy it as 1 share/etf, they do the borrowing/buying/paying interest/selling part.
they are also eligible to be hold in ISAs even in SIPPs
This is all true guys but I’m talking about literally borrowing money to invest - taking out a loan, rather than a leveraged ETF. This can be part of a “trading212 premium” feature
Yes I know, but I said that’s unlikely to happen any time soon, which is why I was making you aware of the other option that is available now
Ah yes, I understand. Thanks for clearing it up.
Not that I’m advising or advocating it. But what is the difference between T212 offering you a loan as oppose to HSBC? Or a Payday loan lol
Exactly, if OP wants to invest with debt, he can borrow money from his local bank branch.
Isn’t CFD basically the same?
For example, you can buy 100 Apple shares at a fraction of the cost, and keep whatever profit you make minus T212’s fees.
Although I agree with the other comment where you should probably just get a loan from your own bank, and buy the 100 Apple shares with that.
Yes and no. CFDs use much higher leverage, like 5x. And carries a higher risk in that you can get margin called and you may end up being forced out of your position before you go negative. With a loan you can go negative, but you are not forced to sell so there is a chance your assets could see green again if you can continue to service the loan.
That is the worst thing I have ever heard off, taking out a loan to invest. Only invest money you are ok losing.
Investing in real estate is practically taking out a loan to invest. There are a few studies showing that the benefits of leveraged investing for a young and upcoming investor far outweigh the risks if you are investing for the long-term.
But I’m really not here to argue / discuss. We can have another category for a discussion, im just defending my question.
Every investor has a different risk tolerance and a different investing strategy.
Have a good day
Interest on payday loans can be 22-1000%. This is not manageable for an investor.
A personal loan is more realistic, with interest ranging 2-8%. However, my reasoning for trading212 offering this is:
- I’m a user of trading212, I’d rather they profit from the same transaction rather than my local bank.
- It would highly reduce red tapen (for the consumer). It would be so much easier.
- Trading212 may be able to offer a more competitive loan such as m1 borrow which is at 3%
Might be another stream of income for T212 so I hope they consider it. I’m a bit of a pussy, I don’t like touching leverage. I know it would probably bring better returns but I dont want to get in too deep with debt
The OP is not asking for something bizarre on unheard of. Leveraged investing is fairly common practise. The difference between a bank and trading platform is, in best case scenario it’ll take a day for the money to lend on your account, and this from my experience is a “very best” scenario, there will be early repayment fees, application forms etc.
While investing in margin, you’ll get the “loan” the instant you execute the order, and you can close it w/e you wish. Your existing shares/cash will be locked in to your account and will be treated as collateral which is the reason broker can give you an instant loan without doing credit checks etc.
lets say they are similar, but not same. With CFD you are literally buying contracts and you have no rights within the underlying share. While on margin you own the real share.
Unfortunately your ability to hear matters little to none in the dodgy roads of investing land Google heard 200B+ times
What trading platforms currently offer loans?
there are hundreds of these can you please click on the google search and add platform and/or search for “leverage trading platform” on your favourite search engine?
Telling me there are hundred while not providing an example isn’t very good discourse. I have accounts with several brokers like Hargreaves Lansdown and IG. While yes they offer leveraged instruments, they don’t offer loans. I’m not really sure you know what you are talking about.