Yes
No, you just wonât be able to buy anymore.
Yes
No, you just wonât be able to buy anymore.
Another unfortunate outcome of this maximum position size risk management policy is that I and many others cannot average down in the stocks we have, especially the investments we have the highest conviction in and are willing to take a risk on.
This puts us the customer at the risk of losing money. Iâm not sure if Trading 212 has even considered this, or even cares.
You could average down on another platform, which only encourages 212 users to potentially exit. Not that it effects me but I donât get the rationale.
If we were to consider holding large positions in illiquid stocks similar to gambling, then yes potentially limit the user.
I still think there should be a warning to the user instead. In the app, your position shown as a % of the average daily trading volume should be shown. The user can then decide if they are happy to accept the risk it may take several days or more to sell out a position.
You could average down on another platform, which only encourages 212 users to potentially exit. Not that it effects me but I donât get the rationale.
Are you suggesting transferring the positions away from Trading 212? Trading 212 do not support that so I donât see how I can average down on my original investment with another broker. Buying more.shares with another broker may average across the 2 accounts, but thatâs not the point Iâm making as youâd still limit your potential upside by the loss on the original.
For example, you could average down on a stock and if thereâs an unexpected run in the SP, you could sell out to break even and get all your money back or come out with a profit.
Itâs not uncommon to hold large positions in biotechnology stocks that eventually get acquired by big pharma. Limiting my ability to average down means limiting my potential upside. Companies could also get bought out below your average and youâll lose money, but if you had the ability to average down, you could emerge break even or profit.
If Iâve done my DD and choose to go heavy into any stock, it should be my choice and not my broker to decide how much of a stock I can buy. If I was using a margin account, thatâs different.
You call holding large positions in illiquid stocks akin to gambling but thatâs your opinion and stocks donât always remain illiquid.
Well, averaging down on a single broker or 2 has the exact same effect. You arenât making less profits if itâs on a 2nd account. Your initial purchase at a worst price doesnât magically get better, only the average position is green, not each underlying purchases.
The only difference is in one case, you actually see that some your purchases are still red, while on the other you get copium pill that âit all shows greenâ.
But in the two brokers case, you seem to forget your green position on the 2nd broker is yielding a greater profit, and the average return between the 2 will be exactly the same as the return on the average position.
But in the two brokers case, you seem to forget your green position on the 2nd broker is yielding a greater profit, and the average return between the 2 will be exactly the same as the return on the average position.
I get your point, yes and no, itâs not that black and white as there are implications of using different brokers which limit your actual take-home. For example, if youâre in the UK using an ISA account with Trading 212 in one tax year which prevents you from having another stocks and shares ISA within the same tax year. Assuming you exit a position in a stock for whatever reason this tax year with profit, in the case of the ISA you pay no tax on the profits, but in the case of your account with the other broker, you will. Your potential upside is thus limited.
In an ideal world, this shouldnât even be a conversation piece. Iâve used / use a decent number of brokers, including Interactive Brokers who these guys use as an intermediary. No other broker has this kind of risk management policy for what equates to a âcash accountâ with limits on how much of a stock you can buy.
Youâve got ÂŁ12,300 CGT limit before tax though. Thatâs worth using if needs must.
Yep, Iâm fully aware of that and will use every penny I can squeeze from the CGT limit. As I said before, all this mental gymnastics shouldnât be necessary with the freedom to trade the markets as I choose.
This right has not been taken away from you.
This right has not been taken away from you.
I would class limiting the maximum position size I can hold of a stock as impinging on my freedoms for my Trading 212 account for all the aforementioned reasons, but in general, you are correct, I still have my rights.
Couldnât agree more!
In fact this is exactly why I am forced to open another brokerage account. I chose Interactive Brokers
Tobacco companies donât restrict the amount of cigarettes you can buy, they just pop a warning on the packet suggesting smoking is bad for you and could cause cancerâŚ
212 should do the same, âwarning this instrument has low liquidity, you may lose money investing in this companyâ
Boxes have been ticked, everyone is happy, Keep it simple.
That would be nice if that was the problem
Basically T212 are encouraging day traders to stay away from joining 212.
Averaging down is an important part of day trading and with this limits etc it makes it hard for day traders to join T212. You donât have to come here and request hey guys I want to average down increase the limit lol
In U.K. there are no real alternatives available yet but I reckon very soon we may have a platform that offer better service to t212
Check Freetrade mate
Is it? I thought the whole idea of day trading is to do your buying and selling then close out your positions by the end of the day rather than average down.
Nah youâre clearly doing it wrong
Hi, I bought BOIL on 6th Oct when the limits were (I believe) Max order 1,000,000, Max Position 5,127,595. Now the share has risen dramatically the limits seem to be 100,000! (why such a massing reduction?) Now I canât add more or take the profit without setting up 10 individual sells. Couldnât the max sell be set at the level of your holding regardless of the max order value?