2022 SPY vs QQQ – Which Is Best For Options Traders

I have been trading SPY Options for more than 7 years.

Then in May of 2021, something happened to QQQ Options that changed my mind from that point forward.

Today I will be sharing my experience trading SPY vs QQQ Options so that you can learn from it in order to Take your Options Trading to the Next Level.

SPY vs QQQ – The Popularity Contest

If you have been trading US stocks or options for awhile, chances are you have come to learn about SPY ETF (Exchange Traded Fund).

If not, you can certainly add to the popularity of this instrument over its tech peer QQQ.

According to Google trends, SPY is 10 times more popular in searches than QQQ with their respective score 62 (SPY in blue) vs 4 (QQQ).

The above view represents a comparative live worldwide view of SPY vs QQQ.

For non traders, this popularity contest presents QQQ as secondary trading instrument compared to ins counterpart SPY.

However, you and and I know than this could not be further away from the truth.

Therefore, one can really wonder what’s going on here ?

Let’s try to get you some answers below.

Who Trades SPY and QQQ

Let’s try to find out if Google Trends data may be skewed by the fact that the word

SPY can appear in searches not related to trading ( yeah there are movies about SPY – singular).

In order to do so, I researched data from two popular trading medium.

One is the social media of stock market known as Stocktwits.

The other is none other than the high profile growing trading platform Webull.

Both have this common trending indicator on how many traders are watching each specific stock.

2022 SPT vs QQQ - Which is Best For Options Traders - Numbers of Traders for SPY vs QQQ according to Stocktwits and Webull
SPY vs QQQ Traders in Stocktwits and Webull Platforms

Instead of just pure searches from Google, I now can present you the real attractiveness of SPY vs QQQ using real traders from Stocktwits and Webull trading platform.

Which one HAs the Edge SPY or QQQ ?

The “traders” numbers may not be as one sided in favor of SPY as Google Trends data but nonetheless, SPY is still clearly leading QQQ ETF.

Just in case you may be wondering what is the big deal about this data on which one of these two ETFs is more popular than the other, please allow me to remind you of the context.

Should you find out that one instrument you are interested in trading can provide more value than a similar counterpart, well you would have discovered an edge that you can take advantage of.

As you may know by now, having an edge is what trading is all about and my goal from this point on is to show you that one of these two has an edge over the other one.

SPYQQQSPY vs QQQ Ratio
Google Trends62415:1
StockTwits Traders363K112K3:1
Webull Traders160K81K2:1
SPY Vs QQQ Popularity by Medium | Google Trends vs Stocktwits vs Webull Platform

Once I establish that edge from data and my actual trading, all you will have left to do will be to emulate my Trading System to start making money consistently day trading one of these two ETFs.

First, let me show you some similarities between SPY and QQQ.

Similarities Between SPY and QQQ

Aside from the obvious fact that SPY and QQQ are both Exchange Traded Funds (ETF), they have a big common characteristic that you and I need to explore.

As ETFs, SPY and QQQ are tobe seen as a basket of selected stocks in which each stock has a weighting.

Think of this as ya basket of fruits where some of the fruits have a higher representations.

Such baskets can have 3 apples, 2 pears, one papaya, one orange , one pineapple 🙂

In this case, the fruits are stocks.

Therefore as the importance of some stocks grow higher so will the direction of the ETF be dictated by those stocks.

Now, what if I tell you that even though SPY represents 500 of the USA most powerful stocks, only a handful actually influence the direction of this ETF.

Furthermore, these very few stocks are the same ones that have the highest weighting on the Techs ETF QQQ.

In the Table below, I am summarizing the Top10 Holdings for SPY and QQQ with their respective weighting (importance) in each ETF.

RankStockQQQ Weighting (%)SPY Weighting(%)
1AAPL11%6.1%
2MSFT10.2%6%
3AMZN7.8%4%
4TSLA4.2%1.7%
5Alphabet4.1%2.1%
6NVDA3.9%1.5%
7Google3.8%2.3%
8FaceBook (FB)3.7%2.3%
9PayPal (PYPL)2.3%N/A
10Adobe Inc2.1%N/A
Top 8 Holdings of QQQ are also Top 8 of SPY

SPY vs QQQ Top Holdings Review

The first glance at this data reveals that the Top 8 stocks in terms of weight (importance) on both SPY and QQQ are identical.

Let’s spell these technologies stocks out so that it is crystal clear for all that trading (or investing for that matter) SPY or QQQ is basically trading technology stocks.

Apple | Microsoft | Amazon | Tesla | Alphabet | NVDA | Google | Facebook are the most important stocks inside the QQQ ETF.

These only 8 stocks accounts for 49% of the total ETF.

Yes, you are reading this correctly. This same group weights 26% inside of SPY.

Given that SPY has 500 stocks, I do not know about you but seeing that less than 2% of the stocks in SPY ETF account for more than a quarter (26%) of its price is a big eye opener.

In Summary, we have 8 stocks that drive QQQ each and every day while being of great importance in the broader market index SPY.

Hence, once could infer that SPY mostly derives its price from QQQ given that the latter is one of 11 sectors of SPY yet 8 of its stocks have a combined contribution of 26%.

Historical Returns of SPY vs QQQ

In my goal to prove that despite having similar Top 8 holdings, QQQ and SPY differ in their benefits for day traders, I would like to offer you Exhibit # 1 in the form of the the last 10 years returns for each ETFs.

QQQ vs SPY Chart Over Last 10 years

In the view below, I trended both QQQ and SPY from April 2011 to October 2021.

The top line is QQQ while the bottom line is SPY.

The results is very clear.

2022 SPY vs QQQ -Which ETFs is best for Options Traders - 10 year Growth Rate of QQQ vs SPYs how 130% edge to QQQ
QQQ vs SPY 10 Year Growth Rate | Advantage to QQQ

QQQ grew 527% over this timeframe vs 225% for SPY.

Which means that as an investor, you would have made 1.3 times more money investing in QQQ than in SPY.

From this data alone, QQQ offers a 134% edge over SPY.

Now, you may be thinking over 10 years is a long time and more importantly, how does this edge translate into day trading SPY vs QQQ.

Because after all, the main objective is to find an edge that is actionable in the immediate future.

QQQ vs SPY Charts Since 2020 | Best Era For Day Traders

In the above 10 year chart comparison of QQQ vs SPY, one detail that was not lost to my eyes is the acceleration of the growth starting in 2020.

We know that the pandemic brought a record number of new traders into the stock market in th e spring of 2020.

Is this the reason for the sudden spike in volatility ?

I am not so sure but regardless of the reason, I have data to show that the last 18 months have provided more opportunities for day traders to make money trading QQQ and SPY options.

More Volatility in QQQ and SPY since 2020

In my research for this article, I gathered daily price actions (Open, High, Low and Close) for QQQ and SPY from 2018 to now.

With this information, I was able to determine the average move (also know as the ATR or Average True Range) for each eTF.

The great insight I can provide is that I further broke these daily moves for QQ and SPY into bullish and bearish studies.

This means that I am able to tell by how much the average daily moves are on bullish days vs bearish days.

Average Daily Bullish Move (QQQ)Average Daily Bearish Move (QQQ)
20180.76%-0.89%
20190.55%-0.57%
20201.06%-1.08%
20210.76%-0.92%
QQQ Average Daily Moves Spiked in 2020

In comparison to 2018 and 2019, 2020 average daily volatility spike above 1.06% and -1.08%for bullish and bearish days respectively.

This means that options traders made more money day trading QQQ in both market conditions because the moves were bigger.

2018-2019 vs 2020-2021 Volatility

Though that trend subsided a little bit in early 2021, the recent numbers are still higher than 2018 and 2019 averages by at least 17% .

For the bullish days (+0.76% vs 0.65% in 2018-2019) and 26% for the bearish days (-0.92% in 2021 vs. 0.73% in 2018-2019).

Now, if I was able to provide similar data for SPY, we will really be able to determine which one of the two ETFs has an edge over the other one for day trading of options.

Lord behold, I have that data as well.

Here it is.

Average Daily Bullish Move (QQQ)Average Daily Bearish Move (SPY)
20180.55%-0.89%
20190.42%-0.46%
20200.91%-0.79%
20210.54%-0.92%
SPY Average Daily Moves Spiked in 2020

What does the SPY Daily Average moves study from 2018 to 2021 tell us ?

A great deal.

SPY Volatility Spike in 2020

First of all, the same spike in 2020 we described on QQQ is also true in SPY when comparing volatility in 2018-2019 vs 2020-21.

So yeah SPY options traders have been makin more money recently over the last 18 months.

However, the meat of the data is the fact that QQQ daily moves even prior to 2020 are far higher than SPY average daily variations.

This is true for both the bullish and bearish days when we read the QQQ table and SPY table over the same year.

How much of an Edge does QQQ offer to Options Day traders ?

Here is the Summary view below year after year in each market condition.

QQQ ATR better than SPY ATR by(%)2018201920202021
Bullish Days38%31%16%40%
Bearish Days44%24%37%76%
QQQ Average Daily Moves Compared to SPY by year by Market Condition (Bullish and Bearish)

The above table is the main take away I want to give you today on why day trading QQQ options over SPY Options is better for you as a trader.

On bullish days, QQQ options will give you in average 40% more profit compared to your fellow SPY traders.

In bearish days in 2021, that edge grows to 76% !

I do not know about you but that is all I need to make QQQ my favorite ETF to day trade Options with in 2021, 2022 and beyond.

There is just one major fact I need to reveal to you to fully close this tutorial.

What Makes SPY and QQQ Attractive for Options Day Traders

The main reason I trade SPY more than any other stock is the availability of mid week options.

Meaning that we do not have have to wait until Friday for Expiration.

Why does that matter ?

Because with closer Expiration date on Mondays, Wednesdays and Fridays, the cost of options is small.

Which menas that you do not need thousand of dollars to trade otpions.

Better yet, you may not even need hundreds of dollars to do so as illustrated in the short video below showcasing how I am able to trade very cheap options as low as with $1 !

How To Trade SPY Options for Profit

In case you are new to this blog, may I suggest you read this expose on how to trade SPY options for profit that I have been using to consistently get great results.

It is a very simple and effective technique that leverage the volatility of weekly options.

As supporting evidence, there are the many videos I shared on my YouTube channel about this very methodology on weekly SPY Options.

WHY IS QQQ Options Trading More Lucrative Than SPY Since MAy 2021

Since 2018, SPY has been the only ETF to provide mid-week expiration for options.

Until May of 2021 when Market Makers finally decided to to introduce Mondays | Wednesdays | Fridays Expiration for QQQ options.

This is a big game changer for this options trader.

Why ?

Remember how I spent the majority of this discussion explaining that QQQ daily move are higher than SPY ones ?

Consequently, with the introduction of mid-week options on QQQ, this means that QQQ traders will make more money day trading QQQ options on expiration days in lieu of SPY.

2022 SPY vs QQQ Options - Which is Best for Traders - Payout per date inside Successful  Tradings Discord Channel
QQQ Options Payout in Our Discord Since Introduction of Mid-Week Expiration

QQQ vs SPY Story Inside My Discord Room

That is exactly what I have been doing since the first week of May 2021.

Even though I still keep an eye on SPY, 99% of my day trade on Mondays, Wednesdays and Fridays expiration have been on QQQ.

Do not get me wrong, there is still money to be made on SPY Options on expiration day

However, since the research data I provided earlier shows that there is even more money to be made day trading QQQ options on Expiration days, why not focus exclusively on this technology ETF.

SPY vs QQQ | Change of Discord Room Name

Let me share this cute story from last week regarding SPY vs QQQ options trading.

One of the Room in My Discord channel is was named “The SPY that Pays Us” when I first created the channel.

Recently, given the slew of QQQ options trades we have been enjoying ( see videos on YouTube here ), Nick a new trader simply asked me: “Why are we still calling this channel the SPY that Pays US ?

2022 SPY vs QQQ - Which one is best for Optiosn traders - Discord Room named The QQQ That PAys Us
Recent Name Change of former SPY Discord Room to ” The QQQ That Pays Us”

I did not even think about it twice and said: yeah, I agree.

We needed a name change and so we did.

The new room where I post the strategies related solely to QQQ is called ” The QQQ that Pays US” 🙂

Statistics of Numbers of Trades SPY vs QQQ

Just from may Discord channel using the Data posted in the newly renamed “The QQQ that Pays US” room, I have gathered all the outstanding trade on QQQ since early May.

The data features 30 trades on QQQ with average profit of 760% !

Our strategy consist of entering trade on Gaps in the morning .

We setup strangle with strike price about $3 away from current price in each directions.

Then at the close, we can do a similar technique in the last hour or simply follow the closing momentum.

This second part has its best results on expiration days Mondays , Wednesdays and Fridays.

The beginning of the Day technique can works on Tuesday and Thursdays.

Such was the case today , yeah as I am finishing this SPY vs QQQ debate.

I trade the SEpt29 365 Puts that went from 48 cents yesterday at close to almost $6.

For a Day trade entry, you would have most likely ended up with 500% to 600% profit.

CONCLUSION

I provided multi year research that showed that QQQ options traders are better off with this ETF rather than SPY.

Hopefully this settle the proverbial question you may have had prior to learning about SPY vs QQQ for 2022.

I also introduced my methodology on how I like making money trading QQQ Options.

Should you want to learn more, I strongly invite you to join our 10-baggers Trading System.

I will help you Master The Insights into Making a Living Trading QQQ options in 2022 and beyond.

Is it worth Trading on Margin? – Easy Step by Step Guide

Is it worth Trading on Margin?

Trading stocks on margin entails borrowing money from a broker in order to make a transaction. But is it worth trading on Margin? Let’s find out. 

A margin account improves purchasing power while also allowing investors to utilize someone else’s money to raise financial leverage by borrowing money from other investors. 

Margin trading has a higher profit potential than regular trading, but it also carries a higher level of risk.

Is It Worth Trading On Margin | What is Margin Trading?

Buying stock on margin implies borrowing money from a broker in order to make a transaction. As a result, you might consider it a loan from your brokerage. 

Margin trading permits you to purchase more stocks than you would ordinarily be able to do. A margin account is required in order to trade on margin. 

This differs from a traditional cash account, in which you trade with the money that is now in the account. To create a margin account, your broker will acquire your signature. 

The margin account may be included in your normal account opening agreement, or it may be a completely different arrangement from your standard account opening deal. 

A minimum initial investment of $2,000 is necessary to open a margin account, however certain brokerages may ask for a higher amount. The minimum margin is the amount of money that you put down as a deposit.

How Does Margin Trading works?

Observing how margin trading could play out in the real world is the most effective approach to learn about its complexities.

Consider the following scenario: Jerry has $5,000 in cash on hand, and he wants to purchase a stock that is worth $100 a share. He proceeds to purchase 50 shares of the stock.  

One year later, the stock price has increased to $120 a share, and Jerry chooses to sell all of his remaining shares for a total of $6,000. 

Is it worth Trading on Margin? - How Margin Trading Works?
How Margin Trading Works?

Jerry generated a $1,000 profit on his initial investment, resulting in a $1,000 profit. Generally speaking, this is how the stock market operates.

But first, let’s go back to the beginning of the narrative. Following margin regulations, Jerry could put down $5,000 and then borrow an additional $5,000 to purchase 100 shares of the stock he was interested in buying. 

Jerry would gain $12,000 if he performed that leverage trade and then sold all of his shares a year later at the same $120-per-share price, resulting from that margin trade. 

Jerry would wind up with a little less than $2,000 in profit after he pays back the $5,000 he borrowed (plus interest) on his loan.

That sounds fantastic, doesn’t it? Not so fast, my friend! Keep in mind that while your winnings are larger, your losses are also larger—this is the downside of margin trading.

A decline in Stock Price

What if the stock price dropped to $80 per share after a year and Jerry decided to sell and take his losses? 

Even if Jerry was able to sell all 100 of his shares for $8,000, he would still be required to repay the $5,000 he borrowed (again, plus interest). 

After subtracting this amount from his initial investment, Jerry is left with less than $3,000, which indicates he has taken a $2,000 loss. Yikes. If he had just continued to invest his $5,000 in 50 shares, he would have only suffered a loss of $1,000.

Buying on Margin

Purchasing stocks on margin is similar to borrowing money from your broker in order to purchase shares. 

The use of margin increases your prospective returns, both for good and for worse, and it is critical for investors to grasp the implications and potential ramifications of doing so.

First and foremost, borrowing money on margin entails paying interest to your broker on the money you’ve borrowed. 

For example, at Fidelity, the interest rate on margin balances up to $24,999 is 8.325 percent. With the maximum rate being $24,999. Consider the difference between that rate and the possible yearly return of 9 % to 10 % on stocks. 

You’ll quickly see that you’re taking on the risk, but the broker is reaping the profits to a significant extent. 

In order to take advantage of margin, you must be concerned about your net profit margin. Which is the amount of money left over after paying interest. And which will be less than the amount of money gained through investing.

Investors should also be aware that brokerage firms have initial margin requirements, also known as minimum margin requirements. It requires the investor to deposit a certain amount of money into their account before they may borrow money. 

To utilize margin at Fidelity, you must first deposit $2,000 into your account. The margin requirement for purchasing an individual stock is 50 percent. Which means that if you wish to purchase stock worth $10,000, you must put up an additional $5,000 in equity. 

In addition, there are maintenance margin requirements of at least 25 % equity. Which would apply when account values decrease. And that rate may be modified based on how the account performs and overall market volatility, among other factors.

Margin Call

When you have a margin loan that is still owing, your broker may issue what is known as margin call. Which is particularly useful if the market swings in your favor. 

When you receive a margin call, your broker may require you to either provide additional funds or sell positions that you presently hold in order to meet the call. If you are unable to cover the call. Your broker will sell your positions in order to make up the difference.

However, if your broker begins to sell off your positions, that broker isn’t concerned with your tax status, your assessment of the company’s long-term prospects, or anything else other than meeting the call. 

If the market turns against you in a significant way. For example, if the business whose stock you purchased on leverage went bankrupt and the shares became worthless. You’ll still responsible for the money you borrowed.

What are the Benefits of Margin Trading?

The following are some of the benefits of Margin Trading:

The opportunity to leverage assets

In order to enhance the amount of your investment, you may buy stocks on margin and use the value of the assets you currently own to leverage the size of your purchase. 

If the value of your investment grows, you will be able to potentially increase your returns as a result of this strategy.

The ability to profit from share price declines

Short selling is a complex investment technique in which an investor attempts to profit from a decreasing stock price by selling shares at a loss. 

You must first borrow shares of stock from a brokerage business in order to sell a stock short. This requires that you have a margin account approved by the brokerage firm.

Is it worth Trading on Margin? - Win - Win Situation
Win-Win Situation

After borrowing shares, you sell them and then repurchase them at a later period at a cheaper price. Assuming that the price has dropped. 

Your profit would be equal to the difference between the proceeds of the initial sale and the amount necessary to purchase back the shares.

The capacity to diversify a portfolio

If your portfolio contains a significant block of stock from a single company. Such as a current or previous employer, you may be placing too many eggs in one basket and risk losing your investment. 

The use of your shares as collateral for a margin loan. On the other hand, maybe possible through the use of a margin account. 

Once you get the loan funds, you can invest them in other investments. Rather than selling the stocks that you originally purchased with them. 

A significant unrealized capital gain and the desire to maintain it that way might make this method particularly advantageous.

A flexible line of credit

A margin loan can be taken out at any time once your account has been approved for margin borrowing. You will not be required to submit any extra paperwork or applications. 

It may be advantageous to have immediate access to cash in a variety of situations, such as when you are jobless, when you have an unexpected medical cost, or when you require a rapid means to access cash for any other reason. 

If your brokerage account includes a checking account, you may simply write a check to cover the transaction.

Interest rates are at historic lows

With a margin loan, you will be subject to interest charges in the same way that you would with any other loan. 

As a result, because margin loan rates tie to the federal funds target rate. Your interest rate may be lower than what you would pay for a credit card cash advance or a loan. Particularly if you have a big amount. 

It is possible that margin rates are competitive with rates on home equity loans. But without the hassle of paperwork and application costs.

Flexibility in terms of repayment

As long as your debt does not exceed your margin maintenance requirement. You are free to choose your own repayment plan for your loan.

Interest that is tax-deductible

The interest that accrues in the account may use to reduce taxable income in the future. For further information about your specific tax position, consult with your tax expert.

Participation in advance option strategies

Being approved for both a margin account and options trading gives you the ability to make sophisticated options orders on stocks, ETFs, and indexes, such as spreads, butterflies, and uncovered options on these instruments.

What are the Risks Associated with Margin Trading?

The concept of putting lipstick on a pig isn’t something we’re going to do here; margin trading is a pretty bad idea. This is a terrible concept. Debt is already a bad investment in and of itself—but attempting to invest with debt? That takes dumb to an entirely new level.

One of the most widespread misconceptions is that billionaires gained their fortunes by taking large financial risks with their money. 

When Trading On Margin Goes Wrong

Wrong! While it is true that virtually all investments include some level of risk, millionaires keep their risk-to-reward ratios in line by sticking with tried-and-true assets that have a proven track record over a lengthy period of time.

A large portion of the millionaires in the world owe their fortunes to their plain old 401(k) and IRA accounts! The affluent individuals we know do not rely on debt—or, pardon us, “leverage”—to achieve their financial success.

Here’s the deal: every time you put yourself into debt in order to invest. You are putting yourself at risk of financial ruin, and it is just not worth it. 

When it comes to margin trading, a few bad decisions might result in the loss of your whole portfolio. 

Interests on Margin Accounts

Not only do you run the danger of losing your whole investment if your stocks take a plunge. But you must have to repay the margin loan you took out, plus interest if your stocks continue to decline. 

Because of the interest payments and charges you must pay in order to execute your transactions. You might potentially lose more money than you initially invested in some circumstances.

Millionaires understand that accumulating wealth takes time and that there are no shortcuts to success. They don’t take needless chances with their money, and you shouldn’t either.

Failure of Margin Trading

According to media sources, a 20-year-old student in the United States committed himself recently after discovering a $750,000 negative balance in his trading account, according to the report.

The student was trading options through the use of an app that was popular among ordinary investors in the United States.

Interest Rates on Margin Accounts

You’ll be required to pay interest on the amount of the margin loan, just as you would on any other loan you’ve obtained.

Margin interest rates are generally lower than those charged by credit cards and unsecured personal loans; nonetheless, you should conduct your own comparison.

Based on a tiered schedule that is defined by the amount of margin loan taken out, the interest rate is adjustable. If you have a large amount, you will be charged a reduced interest rate.

Debit balanceMargin interest rate
$1 million +4.000% (3.075% below base rate)
$500,000–$999,9994.250% (2.825% below base rate)
$250,000–$499,9996.575% (0.500% below base rate)
$100,000–$249,9996.825% (0.250% below base rate)
$50,000–$99,9996.875% (0.200% below base rate)
$25,000–$49,9997.825% (0.750% above base rate)
$0–$24,9998.325% (1.250% above base rate)

Ways to Avoid Margin Trading Risks

  • Consider establishing a cash buffer in your account to assist decrease the risk of receiving a margin call in the future.
  • Take steps to prepare for volatility; structure your portfolio such that it can sustain large swings in the total value of your collateral without dropping below your required minimum equity.
  • Invest in assets with high return potential; the securities you purchase on margin should, at a bare minimum, have the ability to earn more than the cost of the loan’s interest payment.
  • Decide on a personal trigger point, and have additional financial resources on hand in case your balance reaches the minimum required to maintain your margin account balance.
  • Pay down interest charges on a regular basis; interest costs post to your account on a monthly basis. So it makes sense to pay them down before they balloon to unmanageable proportions.

Alternative to Margin Accounts

A cash account is the only alternative to a margin account. A cash account is a kind of brokerage account in which the investor is required to pay the entire amount of money for the securities that are bought.

Quite simply, your money represents your purchasing power in a cash account. In order to trade, you cannot borrow money.

Keeping track of your settled funds and unsettled monies is essential while operating a cash account. Money has been collected.

Most of the cash collected from liquidation holdings over the past two days is included in the unsettled funds’ category. It becomes settled money once it has been settled.

It is not necessary to count day trades while using a cash account. With your settled money, there is no restriction on how many day transactions you may make.

Please bear in mind that trades are done in a cash account takes 2 business days for the funds to fully settle before they may be utilized to purchase and sell in the same account again. Two business days are added to the date of the trade.

When funds are used to acquire securities that have not yet settled in the account, it is considered a good-faith breach. Because of this, it is quite easy to obtain good-faith violations if you engage in day trading with a cash account and do not have sufficient settled money (GFVs).

Margin Trading – A Quick Summary

Here is a quick summary of Margin trading that will help you to decide whether it is worth it or not:

Minimum Investment$2000 (Depends on Broker too)
Benefits• Maximized potential returns
• Tax-deductible allowance
• Advance trading options
Risks• High chances of loss
• Interest Expense
• Chances of losing the initial investment
Best Margin Trading Platforms• Capital.com
• Interactive Brokers
• Plus500
• Charles Schwab
• Fidelity

Conclusion

Margin trading entails a considerably higher level of risk than traditional investment. It is possible that you will lose even more money than you initially invested if the transaction does not go well for you. 

However successful your trading is, interest costs on money borrowed might eat away at your profits in the long run.

Assuming that you are completely aware of the dangers and expenses associated with margin trading. It has the potential to improve your earnings and return on investment. It may also make it possible for you to invest in a wider choice of assets.

Is Acorns Investing Worth It? Our 2022 Analysis

Is Acorns Investing Worth It?

Acorns is one of the most popular round-up investing applications available, and it is among the finest in the business. It’s simple to use, offers a fantastic education platform for novice investors, and has simple, upfront costs, among other things. But, Is Acorns investing worth it? Let’s find out!

Is Acorns Investing Worth It | What is Acorns Investing?

Acorns is a fintech company best known as a micro-investing platform. It allows users to set up automated investments into a portfolio through Round-Ups: Acorns rounds up a debit or credit card purchase made on a linked card to the nearest dollar and invests the change on behalf of the member.

Investments are made into one of five portfolios carrying different levels of risk. Acorns is one of many fintech companies focusing heavily on millennial investors, including Robinhood Markets, Inc. and Stash Financial, Inc.

It appeals to millennials and other people new to the world of investing, who may not have significant capital to put toward their retirement. Acorns’ goal is to enable users to invest early and often and with minimal effort. The average Acorns member invests more than $30 per month through Round-Ups, the company’s signature program.

When was Acorns Investing launched? 

Acorns is an Irvine, California-based financial technology and financial services business that specializes in micro-investing and Robo-investing. Acorns had 8.2 million clients and $3 billion in assets under management in 2020, according to Fortune’s Impact 20 list.

 It was first released in 2014 as an iOS and Android app. The portfolio choices available to users created in collaboration with Nobel Laureate and paid adviser Harry Markowitz.

Who created Acorns Investing App? 

Walter and Jeff Cruttenden, a father-and-son business partnership, established Acorns in 2014. Walter, the father, established investment banking company Roth Capital and was the founder and CEO of E-Trade’s investment banking division. 

Shlomo Benartzi, a behavioral economist, named head of an Acorns behavioral economics committee in 2018. He is working on the Money Lab project, which would perform field tests on customer spending.

CEO Noah Kerner, who formerly headed creative branding firm Noise and served as Chief Strategy & Marketing Officer at WeWork, now leads the business. Acorns intends to go public in May 2021 via a merger with Pioneer Merger Corp, a blank-check business.

How Does Acorns Work?

Acorns is a platform that allows members to invest by saving small amounts of money regularly; a method known as micro-investing to save for retirement. Essential banking services are also available on the website for a low fee.

The company’s services are divided into three areas. The first allows members to invest their spare cash in exchange-traded funds (ETFs). The second feature allows users to create and fund an IRA directly through the platform, and the third gives members access to a debit card provided by Visa, Inc.

Acorns offer five distinct Robo-related products for Invest, Later, Spend, Found Money, and Early.

Invest 

A taxable investment account in which you may invest in exchange-traded funds (ETFs) based on your risk tolerance and financial objectives. 

Round-ups and dollar-cost averaging are two methods to keep the account funded indefinitely. You may set up regular donations to your account for as little as $5 with the latter. As previously stated, the former invests “spare change” from a connected account.

Is Acorns Investing Worth It? - Acorns Mobile App
Acorns Mobile App

Later

Retirement is referred to as “later” by Acorns. You’re meant to invest for the long term, and selling your assets too often may be expensive. 

Perhaps Acorns should assume that their client base understands what “retirement” entails. In any event, “Later” is just a method to deposit funds into an IRA, which is a requirement for any Robo-service.

Spend

A checking account that includes a debit card and waives several fees, including one for maintaining minimum balances. 

Some ATM costs are also reimbursed. Smart Deposit is another tool that enables you to automatically drain money from a direct deposit in your Spend account into other accounts, such as Invest. 

Found Money

A website that gives you a tiny percentage back on purchases made at hundreds of big stores, including Walmart. The money you save when you purchase on Found Money goes into your Invest account.

Early

Acorns’ most costly tier offers access to a UTMA/UGMA account, enabling parents to open up accounts for their children without dealing with complicated paperwork.

What are the features of Acorns investing?

You can set up regular payments of larger amounts, receive referral incentives, and earn additional cash to invest by shopping via Found Money, the main Acorns app’s rewards program, to increase your Acorns balance, but these features aren’t as well promoted as the ability to invest your change. The features of acorns include: 

  • Diversified portfolios.
  • Automatic rebalancing.
  • Access to Acorns Earns partners to earn while you shop.
  • On-the-go accessibility through our mobile and web app.
  • Investment support from our dedicated support team.
  • Access to Acorns Later, an easy way to save for retirement.
  • Access to Acorns Checking, the only debit card that saves, invests and earns for you.

How Can You Benefit From Acorns?

“The ideal moment to start investing was ten years ago. Today is the second-best time”. This is a saying you’ve probably heard before, and it couldn’t be more accurate. 

Compound interest has more time to act to your advantage the sooner you start investing.

For a student, is Acorns investing worth it? Acorns offer a great deal. It may be a fantastic method for students with large debt loads or modest salaries to start creating money for their long-term future.

Acorns are well-known for its ability to invest your extra cash, and for a good reason. It’s a fantastic concept, and Acorns makes it simple. 

Is Acorns Investing Worth It? - Acorns Mobile App
Acorns Mobile App

The majority of individuals are unaware that investing isn’t limited to spare cash. You have the option of making more significant donations, which may be done automatically.

You may set up an account to automatically invest a modest but regular amount of money each month. You’ll have a far more significant effect if you combine automatic contributions with round-up investments.

Keep in mind that you’ll have to pay a monthly charge to utilize Acorns. To make the entire thing worthwhile, you’ll want your investments to be more than your charge.

Rounds Up Method

Acorns is well-known for its “Round-Ups” method, which allows you to invest your spare change anytime you use a connection card. Let’s suppose you spend $9.45 on lunch at your favorite restaurant. You may use Acorns to round up to $10 and invest the additional 55 cents in your Acorns account.

Acorns has taken Round-Ups to the next level. You may choose to increase your “spare change” amount by up to 10 times. As a result, instead of spending 55 cents, you may invest up to $5.50 in that one transaction. This is a great habit to develop if you want to save more money every day.

In this instance, “Acorns Earn” refers to one of the Acorns’ most incredible and most potentially effective features, rather than any dimes or pennies you may discover on the pavement.

The way it works is that every time you use your Acorns-linked debit or credit card at a participating shop, that retailer will contribute to your Acorns investing account.

We’re not even talking about off-brands here. These are presumably companies where you already spend money.

Checking Account

Acorns also provide an Acorns Spend checking account. With their Smart Deposit service, you may have a part of your paycheck automatically deposited into your checking, investment, or retirement account. It’s a way to put money into yourself without even thinking about it.

Acorns Spend also includes a Visa debit card, which you may use to make purchases and deposit round-ups into your investing account. You also get access to 55,000 fee-free Allpoint ATMs throughout the United States.

Plus, if you sign up for direct deposit into your Acorns Spend account and get two installments, you can earn $75 right now. That’s an additional $75 you may put toward your investment account, retirement account, or have some extra spending money.

You’re well on your way to getting the most out of the Acorns app if you’ve signed up for Round-Ups and automatic contributions. You may get a bit more out of it if you connect your credit cards.

We aren’t usually lovers of utilizing credit cards. After all, getting out of needless consumer debt is a key to financial success.

Rewards Program

Credit cards with substantial rewards programs, on the other hand, may increase your Acorns advantages if you avoid keeping a revolving amount.

Let’s suppose you go to Starbucks and spend $2.95 on a large coffee. Acorns will round up to the nearest 5 cents and deposit the difference in your account. 

However, if you have a Round-Up booster set, you may round that number up to $5 and save even more money in your account.

If you pay using your Starbucks credit card, the money will be credited to your rewards account as well. 

You’re working your way toward complimentary drinks on top of the additional $2.05 you’ve placed in your Acorns savings account. If you do this every day, it will mount up over time, both in terms of your Starbucks addiction and your money.

Of course, depending on your credit card program, you may utilize this method to earn frequent flyer points and perhaps cashback.

There’s no better way to invest your extra cash and receive the odd store reward than Acorns, mainly since it provides IRA accounts. Acorns’ automated roundups simplify saving and investing, and most investors will be astonished at how fast their pennies add up.

What are the other users saying about Acorns Investing?

Is acorns investing worth it or not can be known by looking at the figure that the business has received about $100 million in venture capital financing since its inception.

Jennifer Lopez, Alex Rodriguez, Bono, Ashton Kutcher, and Kevin Durant were among the prominent investors in Acorns as of August 2019. PayPal, BlackRock, and NBCUniversal are among the company’s investors.

How to buy a subscription of Acorns?

For your financial requirements, Acorns provides three distinct subscription levels.

Acorns Lite costs $1 each month- Are you ready to get started? With a simple, automatic investing account, you can invest spare change, set up recurring investments, and more.

Personal Acorns – $3/month- Your financial health system, complete with all-in-one investment, retirement, and checking accounts, as well as a metal debit card, financial counseling, and more!

Acorns Family- $5/month- There are investment accounts for an infinite number of children per family! Also included are a personal investment, retirement, checking accounts, bonus investments, financial counseling, and more!

While those costs seem to be reasonable, they’re very costly when calculated on an annual % basis, as many other investing apps and Robo-advisors do. 

Is Acorns Investing Worth It? - Pricing
Acorns Pricing

Younger employees just starting—the kinds of investors Acorns aims to attract—will pay more than rival robos.

Assume you have $100 to put in a new investing account. Your yearly fee would be $0.25 if you utilized Betterment, which charges an annual percentage rate of 0.25 percent for its essential Betterment Digital product. The cost of that $100 investment over a year would be $12 if you established an Acorns Lite account.

Consider a $10,000 investment in an Acorns Personal account, which would cost you $36 per year, or 0.36 percent, making it more costly than Betterment.

Naturally, when you invest more, the fees become a lower and smaller percentage of your total amount, but this may take time. 

Expenditure Ratio

The expenditure ratios for investment expenses vary from 0.03 percent (VOO) to 0.25 percent (two ESG funds). If you invest in Early, Invest, or Later, you will pay this amount.

A brief word on Spend: While Acorns’ checking account is technically free, the fact that you must spend $36 per year to get access to it is less than ideal, primarily because other robos, like Betterment, provide access without such restrictions.

Even so, you could see the checking account as a bonus to get into the $3 tier, in which case the cost is less important.

How to cancel the subscription of Acorns? 

If due to any reason, a question arises in your mind that “is acorns investing worth it or not?” and you like to cancel your subscription. Follow these steps while operating from your phone: 

  • Tap the menu (avatar) in the top left corner of the screen after signing in to your account.
  • Tap “Settings,” then “My Subscription,” then “Manage.”
  • Follow the steps to liquidate and cancel accounts by tapping “Cancel subscription.”

And if you are operating through the web and the same question hit your mind that “is acorns investing worth it or not?” and you want to cancel your subscription. Follow these steps to cancel your subscription of acorns:

  • After signing in to your account, go to the top right corner of the screen and select the menu (avatar).
  • Select “Profile & Settings” from the drop-down menu.
  • Select “My Subscription” from the drop-down menu.
  • Scroll down to “Manage” and click it.
  • Select “Cancel Subscription” from the drop-down menu.

To liquidate and cancel accounts, follow the instructions.

How to reach customer care of Acorns if having any inquiry?

If you have any queries, feel free to contact the Acorns Support team:

Phone: (855) 739-2859.

Email: support@acorns.com

What are the alternatives to Acorns? 

Is acorns investing worth it alone, or do an investor have any other option too? The answer to this question comes up with several alternative options. 

There are several alternative applications, which are operating on the principle of acorns. Some of them are Betterment, Wealthfront, and wealth simple. Let’s discuss a few details of these apps. 

Betterment simply levies a fee. It charges a flat cost of 25% per year for its lowest pricing tier, which works out to only pennies a month while you build up your portfolio.

What about Wealthfront, another Robo-advisor? You will require a $500 minimum balance. They do, however, provide free account management for the first $10,000 of each account. Wealthsimple, a Canadian Robo-advisor, charges up to.50 percent in fees but also provides a personal touch.

But an alarm beeps in the mind that is acorns investing worth it more than the others? The answer is, the five investment portfolios Acorns offers to maximize your profits while minimizing your risk.

Moreover, Acorns does not operate on commission. Therefore there are no account minimums. Acorns aims to provide you with the resources you need to take the best possible care of your finances.

We believe that everyone should have access to financial health, so we make it simple to invest in yourself. You can start investing early and frequently with Acorns without making major lifestyle adjustments. You may get start with as little as $5.

Pros of Acorns App

The answer to the question “Is Acorns investing worth it?” has two aspects. One is that the best investing approach is to get started right away—Acorns strives to make this as simple as possible. 

With no account minimum, you can start making regular contributions right away. You can also round up your purchases on connected accounts to contribute even if you do not consider yourself an investor.

However, setting up your savings is straightforward, thanks to an intuitive interface, and you won’t be overwhelmed with a confusing variety of ETFs. 

You’ll spend relatively little in fees if you stick to a primary account without ESG funds. If you need a little push to get start, Acorns’ automated service makes a lot of sense.

Cons of Acorns App

The other aspect of the answer to the question “Is Acorns investing worth it?” is that Acorns has a handful of significant flaws. 

The first is the tiered charge structure, which is prohibitively expensive for individuals who are just getting started with modest balances. It’s a terrible bargain to pay $36 a year to access an IRA when you have a few hundred dollars invested. 

While many Robo-advisors have a $500 or $1,000 account minimum, Betterment offers a no-minimum, lower-fee option.

It’s a difficult pill to take that you have to pay $3 to gain access to your bank account, and there’s no way to speak to a real-life financial adviser.

Meanwhile, although some parents may prefer a UTMA/UGMA account, anybody saving for college may wish 529 accounts were available. 

Furthermore, there are no tax-loss harvesting tools, which will be helpful if you have more money in your account and need to balance the tax consequences of selling winners.

Is Acorns Investing Worth It? – Quick Summary

We have reviewed the Acorns Investing thoroughly above, but does it really worth it? We have devised a quick guide to help you focus on the major factors that will help you decide if you really should use it or not.

Account minimum$0 to open account; $5 required to start investing.
Investment expense ratios0.03% to 0.18%.
Automatic rebalancingFree on all accounts.
Tax strategyNot available.
Portfolio mixThe portfolio mix is generally well-diversified but lacks significant exposure to international bonds.
A sustainable portfolio is available for free.
Account fees (annual, transfer, closing)$50 per ETF to have them transferred to another broker when you close your taxable Acorns account; no charge to sell your investments and have the resulting cash transferred.

CONCLUSION

The only way to fight inflation and make your money generate more money is to invest. Even though the markets are turbulent, you are more likely to earn money if you concentrate on long-term investment. 

Unfortunately, investment is often seen as a problematic and challenging concept to grasp, or at the very least, a time-consuming process to begin. This is why, before risking your real money, it’s a good idea to practice investing with paper trading.

Acorns is generally not a suitable match for people who are well into their careers unless they need to play significant catch-up with investing. 

If you’re in your 40s or later and haven’t begun saving for retirement, you should look into other ways to invest. Acorns are an excellent method to begin increasing your taxable assets, which are an essential component of every retiree’s portfolio.

Overall, Acorns is an excellent method to start investing and developing a portfolio without dealing with the headaches that come with HR. Using these methods to optimize your app use after you’ve gotten started, and you’ll notice your money start to increase quickly.

Investing vs Trading in 2021 – Which is Best For You ?

Investing vs Trading in 2021

Investing vs trading in 2021 are two very distinct ways of trying to profit in the financial markets. Both investors and traders seek gains via market involvement. 

In general, investors seek higher returns over a longer time via purchasing and holding. Traders, by contrast, take advantage of both rising and falling markets to join and exit positions within a shorter time period, reaping smaller, more frequent gains.

Differences Between Investing and Trading

The following are the 5 key differences between investing and trading:

Basic Difference

Trading usually carried out by individuals who engage in intraday trading and are always on the lookout for growth investment opportunities, in which case technical analysis techniques are used. 

They are able to anticipate whether the movement will be greater or lower. On the other hand, an investor is seeking a good return on his or her investment. Moreover, he or she is willing to hold onto their investment for an extended period of time.

Risk

Because there is no hedge against this kind of transaction, the risk associated with this technique is very high, and the amount of money at stake is extremely large due to the lack of downside protection. 

On the other hand, an investor may have a suitable portfolio in which the downside of one item will offset by the upside of other assets in order to hedge against the losses.

Market Change

The movement of the market and the indexes is usually due to high quantities of trading activity, and traders. As opposed to investors, have a significant role in changing the market values in this situation.

Strategies

Traders have a preconceived notion of what is going to happen on the upside or the downside. They trade in accordance with this; they have many kinds of trading strategies like the Butterfly, Short sell, Long Straddle, Strangle, and many more. 

While an investor has a straightforward and vanilla approach to hold the asset while investing: keep the asset.

Predictability

Because buying and selling transactions take place on a daily basis, returns in trading are both unpredictable and rapid. As a result, an investor must wait a long time before seeing a significant return.

Investing vs Trading in 2021 | Trading Time Horizon 

Investing vs Trading in 2021 - A clock illustration of Trading vs Investing Time Horizon
Time Horizon

Day trading requires a daily commitment of at least two hours, which is customary. 

The first hour after the United States’ stock markets are formally opened for business is usually considered to be one of the greatest periods to profit from big price movements. 

As New York’s lunchtime approaches, the stock market’s activity tends to slow down.

When trading full-time, your overall time commitment should be about 15 hours per week on the low end. And up to 40 hours per week on the high end (if you’re trading the most of the day). 

The busiest period for stocks, currencies, and futures in the United States market is around the time of the market’s opening each morning. 

Alternatively, global markets (particularly currencies and European equities) tend to be active in the hours leading up to the European open.

What Type of Investors should consider trading?

If you want to opt to trade, you’re far more concerned with the short term and less concerned with the company as an enterprise. You will almost certainly perform any or all of the following activities, for example:

  • You’re less concerned with whether or not the underlying company will succeed and more concerned with whether or not the stock will generate profits for you.
  • You want to know what other people think about a transaction because you aren’t just betting on a stock or a mutual fund; and you are also betting on the other individuals at the table.
  • You may look at short-term price fluctuations, even monitoring the charts by the minute. In order to forecast the optimum moment to buy or sell.
  • Share price movements influence your decisions rather than the fundamentals of a company.

Age retirement?

In order to be successful in early retirement, you must keep your costs as low as possible while still employed. 

After retirement, you may save a few thousand dollars on your season ticket and you won’t have to purchase another custom suit any time soon, but it’s unreasonable to expect to save a lot of money on energy costs.

If you are willing to take chances and trade on your own account, your money will go further. 

To be successful in trading, however, you must be realistic about your prospects of making a profit: can your approach truly survive outside the environment of a hedge fund or without the flow of orders that you see on the buy-side, for example? 

You might wind yourself duplicating all of the pressures of your day job for a lesser income; this is one of the reasons why my own trade is completely computer-controlled.

Investing Time Horizon

It is possible to invest for the long term (as well as do the study necessary for it) at any time, even if you work long hours in an office job. 

When you’re ready to invest in stocks, you may anticipate spending a few hours each month searching for companies that are consistent with your investment plan. 

Finding or developing an investing plan will require more time in the early stages of the process.

Some individuals prefer to be more active, devoting a few hours each week to research and other activities (especially if they have lots of capital and are looking for multiple opportunities).

Every few months, or maybe just when they are ready to make another purchase, an investor who prefers to “set and forget” may need to do some research or check on their assets.

What type of Investors is Investing Suited For?

Your concern about investing may stem from a lack of understanding of the market or from the intimidating nature of the first investment choices available in many mutual funds. 

If you want to start investing as soon as possible, it’s best to do so as soon as possible. However, there are a few things you should consider before you begin developing your investment portfolio.

The following people should start investing:

  • You are financially stable
  • You know where to invest wisely
  • Investment options are available to you
  • You are patient enough to adopt the “Invest and forget” strategy

What Are the type of Investments they can consider?

Following a year of decreased spending and a handful of stimulus cheques from the federal government, many Americans are sitting on a large pile of cash in their bank accounts. 

Moreover, although the reopening of the economy may result in increased spending on postponed holidays and other pastimes, many people will be searching for ways to put their newly discovered excess to work.

The stock market, as well as almost every other asset class, is flourishing right now, and it may be daunting to dip your toes into the investment waters if you haven’t done so before.

High-yield savings accounts

This may be one of the most straightforward methods to increase the return on your money above and above what you would receive from a traditional checking account. 

Customer access to their money is maintained through high-yield savings accounts, which are frequently opened through an online bank. 

High-yield savings accounts, which are often opened through an online bank, tend to pay higher interest rates on average than standard savings accounts, while still allowing customers regular access to their money.

The money you’re saving for purchase in the next couple of years, or money you’re simply hanging on to in case of an emergency, maybe put to good use in this account.

Certificates of deposit (CDs)

CDs are another option for earning extra interest in your savings. But they will need you to keep your money in the account for a longer period of time than a high-yield saving account. 

When purchasing a CD, you may choose from a variety of terms such as six months, one year, or even five years. However, you will usually be unable to retrieve your money before the CD expires without incurring a penalty.

If you buy one via a federally insured bank, you will be protected up to $250,000 per depositor, per ownership category, if you purchase one through a federally insured bank.

401(k) or another workplace retirement plan

This may be one of the most straightforward methods to get started in investing, and it comes with a number of significant benefits that might be beneficial to you both now and in the future. 

In most cases, your company will match a part of the amount you agree to set aside for retirement from your regular salary. If your company provides a match and you do not join in the plan, you are essentially turning away free money from your employer.

Contributions to a conventional 401(k) are made before being taxed. And the funds grow tax-free until the participant reaches retirement age. 

Some companies offer Roth 401(k) plans, which enable employees to make contributions after they have paid their taxes. If you choose this option, you will not be required to pay taxes on withdrawals made during your retirement.

Employee pension plans are excellent savings vehicles since they are automated after you have completed the necessary setup steps and enable you to make regular investments throughout your career. 

Target-date mutual funds, which manage their portfolios in accordance with a particular retirement date, are another option for you to consider. 

As you move closer to the goal date, the fund’s allocation will shift away from riskier assets to account for the fact that you will be investing for a shorter period of time in the future.

Mutual funds

Mutual funds provide investors with the option to participate in a diversified portfolio of stocks, bonds, and other assets that they may not be able to put together on their own otherwise.

Among the most popular mutual funds are those that follow indexes such as the S& P 500, which is made up of about 500 of the biggest corporations in the United States. 

Index funds often charge extremely low or no fees to the funds’ investors, and in certain cases, no costs are charged at all. 

Due to these low expenses, investors are able to retain a larger portion of the funds’ profits for themselves, which may be a fantastic method to accumulate wealth over time.

ETFs

Unlike mutual funds, exchange-traded funds (ETFs) maintain a diversified portfolio of assets and are traded on a stock exchange throughout the day, much like a stock would. 

ETFs do not have the same minimum investment requirements as mutual funds, which are usually in the range of a few thousand dollars to several hundred thousand dollars. 

Investing in exchange-traded funds (ETFs) may be done for as little as the cost of one share plus any costs or charges connected with the transaction, but you can get started with even less if your broker enables you to buy in fractional shares.

Both exchange-traded funds (ETFs) and mutual funds (MFs) are excellent assets to own in tax-advantaged accounts such as 401(k)s and IRAs.

Individual stocks

Investing in individual businesses’ stock is the riskiest of the investing options mentioned here. But it may also be one of the most lucrative. 

Nonetheless, before you begin trading, you should evaluate if purchasing a stock is a good investment for you. 

Consider if you are investing for the long-term, which is usually at least five years. And whether you are familiar with the company in which you are making the investment. 

Stocks are valued every second of the trading day, and as a result, individuals who own individual stocks are often tempted to adopt a short-term trading mindset when they invest in them.

However, since a stock represents a portion of ownership in a genuine company. Your wealth will grow in tandem with the fortune of the underlying company in which you invested. 

If you don’t think you have the knowledge or the stomach to ride out a bear market with individual equities. You may want to explore the more diversified strategy provided by mutual funds or exchange-traded funds (ETFs).

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Risks And Return

Investing vs Trading in 2021 - Which is best for you ? Trading or Investing ?
Investing vs Trading in 2021

When it comes to trading and investing, there is always a risk. The trick is to understand how much money you can earn in comparison to how much money you can lose.

Trading

You may be able to earn anything from 0.5 percent to 3 percent each day (on the high end). Even while this may not seem like much, it may amount to anywhere between 10 percent and 60 percent in profit each month.

When dealing with smaller accounts, higher return percentages may be achievable; nevertheless, as your account size rises, the likelihood of receiving a return of less than 10 percent each month increases.

If you engage in day trading, you will see your profits multiply fast. Suppose you start with $30,000 and earn 10% each month. 

At the end of the month, you will have $33,000 to start the following month. If you earn 10% again, you’ll have $36,300 in your account. If you earn 10 percent each month for a year, you will have almost $95,000 in your bank account.

Even if you have seven days of losses followed by seven days of wins. You may still end up with a loss overall.

How Much Do You Need TO Gain ?

However, if you’re losing 1 percent or 2 percent of your money each day. Your day trading account may begin to deteriorate very quickly. 

For example, if you lose 1 percent each day over the course of seven trading days. Your account might drop from $30,000 to $27,961.96—a loss of about 7 percent of your initial investment.

You would end up with $28,955,43 if you were to start gaining at a rate of.5 percent per day for the next seven trading days after that losing run. 

However, you would still be in the red. You’d need another seven days of profits of 1 percent or more to make up for your losses and generate further gains.

Stocks vs Options vs Crypto?

When it comes to trading, selecting between stocks, options and crypto is a hard call. So, here is what each of these choices is all about:

Stocks

The long-term potential for growth (capital appreciation) in stocks is the highest among all investment options available. 

Strong, positive returns have often been earned by investors who are willing to hold onto their investments for extended periods of time, such as 15 years or more.

Stock prices, on the other hand, may go down as well as up. As a result, there is no assurance that the business whose stock you own will expand and prosper. And thus there is a risk of losing money if you invest in stocks.

Options

It may be difficult to trade stock options, which can be even more difficult than stock trading. 

When you buy a stock, all you have to do is determine how many shares you want to purchase, and your broker will complete the order at the current market price or a limit price you have established for yourself. 

Options trading requires a thorough knowledge of sophisticated techniques and the process of establishing an options trading account. It entails a few more steps than the process of opening a traditional investing account.

The main reason why you must learn how to trade options even if it is not your primary source of investing is the very low barrier to entry.

US stocks are becoming more and more expensive.

However, through options trading, you do not need thousands of dollars to become an investors albeit a short term investor.

Check out Our recent return trading very cheap options for as low as $1.

Crypto

In recent years, cryptocurrency has developed as an asset class that offers investors the opportunity to make significant returns on their investments. 

These assets, despite the fact that they are not back by the government, have gained enormous appeal in recent years. 

The prospect of making large profits in a short period of time has prompted investors to get on the cryptocurrency bandwagon in droves.

Investing 

The long-term investor has always come out on top when the market has seen a fall in value. For longer periods of time, the Dow Jones Industrial Average spends more time rising than falling. Allowing for more gains than losses on an annual basis.

When it comes to investing, extensive time frames are necessary. And failure to hold an asset during a prolonged slump may result in losses. 

Anyone year may see results that are much greater or lower than 10%. (with negative returns occurring about one out of every four years). Some stocks may never be worth what you paid for them when you bought them.

What are some of the Tools to Start Investing?  [Is Automatic Investing an opportunity for you?

Even the most successful investors had to start out someplace, and that was at the beginning. 

Knowing where to begin and which route to follow, on the other hand, maybe difficult to discern. 

We’ve compiled a list of 3 tools to make the investing process a bit less difficult for individuals who are just getting started.

Personal Capital

Personal Capital is an excellent place to begin your research. The company provides a complete financial dashboard to assist you in evaluating your portfolio’s asset allocation. 

It also consolidates your bank accounts, credit cards, and loans into a single location. It allows you to manage everything from a single location.

Betterment

Betterment is one of a growing number of algorithm-based “Robo-advisors” that make investing simple and affordable. 

Betterment’s website is simple to use, and it employs straightforward asset allocation strategies to distribute your money across a variety of low-cost exchange-traded funds (EFTs).

WealthFront

Wealthfront, like Betterment, is a Robo-advisor that simplifies and makes investing more accessible for individuals. 

It requires a $500 minimum deposit to establish an account, does not sell US government bonds, and provides its customers with access to a unique tax-loss harvesting tool known as the Wealthfront 500, among other things.

How to Limit Exposure to volatility?

When it comes to the markets, volatility often elicits a high level of caution. In fact, market volatility may be visible in both a good and a bad light depending on your perspective.

Low volatility indicates a more stable market (and, therefore, a more stable investment); nevertheless, it also indicates a longer period of time until the financial benefit realized. This is often the case when it comes to the stock market.

Large trading volumes help to improve the stability of the stock market and make it less susceptible to the moves of ‘big fish’ investors. 

Nonetheless, because of its ties to governments and businesses all around the world. The stock market is often influenced by geopolitical developments.

In contrast, cryptocurrency exchanges are more volatile than traditional stock markets. Given that this market is still in its infancy, its highs and lows are particularly prominent, making the cryptocurrency marketplace particularly susceptible to the trading moves of ‘whale’ traders. 

Whale traders are those who have a huge quantity of bitcoin in their possession. As a result, the whole market may be susceptible to the trading choices of individuals who have a significant amount of money involved. 

For example, when news broke that influential investor Elon Musk had invested $1.5 billion in Bitcoin in January 2021. The price of bitcoin surged by 17 percent to a new all-time high, setting a new record.

On the contrary, cryptocurrencies are independent of governments and other global institutions. They are – at least in part – immune to political influence.

What Should You DO: Trading or Investing

Investing vs Trading in 2021
Investing vs Trading in 2021

The discussion is usually clear that investing is a strategy that is more effective for the vast majority of individuals than other options. 

Is it possible for certain individuals to regularly outperform the market? Without a doubt, there is no question. However, for the majority of individuals, being an investor is preferable to being a trader. And it may require less time and effort as well.

Warren Buffett, the legendary investor, advises that investors routinely invest in index funds. Like an S&P 500 fund, and then hang on to those investments for decades. 

This strategy embodies the essence of being an investor. Which is to adopt a long-term perspective while allowing the companies to create profits for you.

Comparative Table

Although we have discussed everything above about the trading vs investing in 2021. However, to summarize all that discussion, here is a table based on capital gains, risks, investment period, and much more:

CriteriaTradingInvesting
IntroductionRefers to buy and sell as per the price movementsRefers to buying and holding the securities for a certain period of time
Investment PeriodGenerally, in this type of activity, the investment is short-term, and there are quick entries and exits.While here, investment is for a long term and exit if far off from the entry point
Capital GainsThere are short-term capital gains and only associated with the upside in the security price.Long-term capital gains can be earned not only with the upside but also in the form of dividends and bonuses periodically.
Risk and methodologyThe risk is very high since it is a short-term investment.Risk is lower comparatively as the investment duration is long.
Types of securitiesOnly securities or stocks can be traded since there is quick entry and exit.Different types of assets can be invested in a portfolio like stocks, bonds, notes.
The intention of the investmentThe motive is to earn profits and exit the position.Value investment is made on the company’s functionality, banking on the company’s fundamentals.
Comparative Criteria of Investing vs. Trading

CONCLUSION

Trading may be a lucrative method to earn money on the stock market provided you have the necessary starting cash. As well as the time each day to execute the trades you want. 

There are certain prerequisites, though, including a strong desire to earn money on trades and an effective risk management plan.

Investing, like trading, has varying degrees of risk, although, for retail and novice investors. It is often less risky than day trading in general. 

If you have limited starting money and do not want to trade on a daily basis. Investing may be a better option for you than trading.

Top 7 Best Apps To Trade Stocks – 2021 Easy Review

Top 7 Best Apps To Trade Stocks

In this modern age, trading stocks is much easier than ever because of many different trading apps. To help you find the best one, we are going to review the top 7 best apps to trade stocks.

Go through all of the features including the fee and commission to select the best one according to your needs.

WeBull

Top 7 Best Apps To Trade Stocks - WeBull Mobile App
Webull Mobile Application

Webull provides a one-of-a-kind community experience and simple-to-use trading tools that will appeal to the majority of youthful investors. It, however, lacks the trading instruments and functionality to compete with leaders of the market, which also provide $0 in stocks and ETF trades.

Who’s Webull for?

Webull is a self-directed investment and trading platform that appeals to intermediate and expert investors and traders. 

Short-term and active traders who want to save money on fees may take advantage of its commission-free structure, which is much less expensive than charges charged by other online brokers.

Despite the fact that the Webull platform’s intuitive features and style may look sophisticated for beginner traders, the platform is nevertheless easily understood. It also provides fractional shares to its clients, allowing even the smallest accounts to participate in the most expensive equities.

Features

Desktop Platform Overview

The desktop platform Webull is the same as the online version. The flexible layout is easy to use due to its widget boxes drag and drop. You can modify it easily. 

It contains preset lists like Hot ETFs and important screener and screener capabilities. The fact that novice traders looking to get into the market could simulate a trading strategy using Webull’s online, desktop, and mobile applications. 

Web platform charting

Webull provides a standard line of charts comprising many different kinds of graphs, suitable drawing instruments, 50 technical indicators, capacity to add hotkeys, and grid designs, for comparing numerous charts. 

On the online platform, we found the charting to be clear and simple to use, and the desktop version was virtually similar.

Market replay

Users may watch time-lapse video replays of stock charts, which is a feature that is exclusive to Webull. 

A replay of the previous day’s price movement, although more instructive, provides traders with a unique viewpoint that cannot be obtained from any other broker.

Webull’s Commissions and Fees

Webull, like its major rivals, does not charge a commission on stock transactions in the United States, nor does it charge a fee to establish or maintain an account. 

Nonetheless, fees levied by the SEC and the FINRA are applicable.

SEC fees.

There is a $13 fee for a net of $1,000,000 in principal on stock transactions alone, with the $0.01 minimum charge per share.

FINRA fees

On only stock sales, the trading activity fee (TAF) of $0.000119 for each share will be chargable, with a minimum charge of $0.01 and a maximum charge of $5.95.

E*trade

Top 7 Best Apps To Trade Stocks - E*Trade Mobile App
E*Trade Mobile App

E*TRADE was founded in 1982 and was one of the earliest online brokerages in the United States. Some of the company’s features include $0 transactions, two outstanding mobile applications, and the Power E*TRADE platform, which is ideal for newbies, active traders, along options trading.

Who E*TRADE Is For?

For more than a decade, E*TRADE has focused on engaged, active investors as well as high-net-worth individuals with a minimum investment of $100,000. Despite being a top 5 broker in several areas last year, especially in options and trading, E*TRADE’s standing among more active investors has been strengthened as a result of the fee reduction. 

The Power E*TRADE platforms are available on both desktop and mobile devices, providing the customers with powerful options analysis as well as strategy-building capabilities. 

E*TRADE has maintained a high ranking among the top online brokerages for beginners, owing to its extensive resources and user-friendly interface. E*TRADE, like other major online brokerage firms, offers plenty to offer investors of all experience levels.

Features

Options trading

Power E*TRADE is a great choice for casual and active options traders since it provides the ideal combination of convenience, superior tools (screening through StrategySEEK, scanning through LiveAction), and smooth position management.

E*TRADE has done a great job of bringing new investors into the game by designing Power E*TRADE, which allows you to master options trading without breaking the bank. 

Charting

Power E*TRADE’s charting engine is provided by Chart IQ, a third-party supplier of HTML 5 charts highly rated by users. 

Panning and zooming are very fluid, and there include an inbuilt Trading Central (Recognia) technical analysis tool as well as 114 extra technical indicators and 32 sketching tools to choose from. 

Futures Trading

As with options trading, Power E*TRADE offers a fantastic experience when it comes to trading futures contracts. 

Multiple futures ladders may be run at the same time, orders can be sent out quickly and easily due to the Quick Trade widget, and maintaining positions is as simple as it is with options.

E*TRADE Fees

In order to participate in the $0-commission revolution, E*TRADE now charges no commission to trade stocks, ETFs, and the majority of mutual funds. 

Options contracts are priced at $0.65 per contract, which is the industry norm, but the price lowers to $0.50 per contract if you make more than 30 transactions each quarter. 

Futures contracts are priced at $1.50 per side, which is less expensive than TD Ameritrade, E*TRADE’s largest rival. Although E*TRADE offers lower margin rates than TD Ameritrade, they are still quite costly compared to Vanguard’s rates.

EOption

Top 7 Best Apps To Trade Stocks - eOption Mobile App
eOption Mobile App

eOption is quite clear about who it wants as a client and how it plans to fulfill their needs: options traders who know what they’re doing want to switch to their platform and save money on options transactions.

Long-term investors and novices will be turned off by this deep discount strategy, while active options traders will benefit from cheap fees and quick executions.

Who eOption Is For?

eOption is aimed at options and stock traders that participate in the markets on a regular basis and who are confident in implementing their options strategies, according to the company. 

The firm’s options costs are competitively priced, which appeals to traders who trade in large volumes. Just to put it another way, eOption doesn’t have many bells and whistles, although it will let you trade a large number of options for a cheap cost.

Features

Paper trading

For investors who are new to trading (and particularly options trading), eOption offers an appealing feature: a free paper trading tool that is accessible to everyone, including those who are not customers of the company. 

This provides investors with $100,000 in virtual cash to utilize while they study and assess trading ideas, test methods, actively monitor the performance of a simulated portfolio, and establish a watch list – all without putting any real money at risk.

Low options contract fee

Many brokers no longer charge a basic commission on options transactions, requiring traders to pay just a per-contract fee, which is typically about $0.65 per contract on most exchanges. 

When you trade options with eOption, the cost is $1.99 plus a 10 cent per-contract charge. In other words, investors who regularly trade four or more contracts in a single transaction will come out on top when they do business with eOption.

Margin rates

Take notice, margin traders: eOption offers some of the most competitive margin rates accessible. At the end of 2020, account balances were based at 7.75% at a base of less than $25,000. If you have a balance of $250,000 or more, you may get as little as 4.75 percent interest.

eOption Commission Fees

  • Prices for options are $3.00 plus $0.10 per option. 
  • Listed stocks: $3.00 per share for market.
  • Stocks (foreign): $39 per share
  • Extended-hours stocks: $25.00 (plus $0.003 per share for each additional 5,000 shares).
  • Mutual funds are priced at $14.95 per share.
  • Bonds: $5.00 each bond for the first 25 bonds, $3.00 per bond for each subsequent bond
  • Orders placed with the assistance of a broker will be charged an extra $6.00.

Robinhood

Top 7 Best Apps To Trade Stocks - Robinhood Mobile App
Robinhood Mobile App

Despite the fact that all online brokers now provide $0 stock and ETF transactions, Robinhood’s lack of trading tools as well as research puts it at a disadvantage in comparison to the rest of the market.

Who Robinhood Is For?

Robinhood is best suited for first-time investors who want to trade in tiny amounts, such as fractional shares and cryptocurrencies, and who don’t want to spend much time doing research beyond looking at what other people are doing with their money. 

The general simplicity of Robinhood’s app and the website makes it incredibly simple to use, and the fact that it charges zero fees appeals to investors who are very cost-conscious and trade in tiny amounts. 

Having said that, the offers are very rare in terms of research and analysis, and there are significant concerns regarding the quality of the trade executions themselves.

Features

Trading tools

Trading tools and features are limited compared to category leaders on Robinhood’s website. For instance, charts are essential, with just four accessible technical indications. 

In the meanwhile, TD Ameritrade provides more than 400, and TradeStation offers over 300. TD Ameritrade and Charles Schwab provide their own live broadcast with in-house specialists throughout the day.

Fractional shares

The greatest power of Robinhood found in its simplicity. For instance, its recurring investing feature allows you to invest a set dollar amount on a regular basis, such as once a week. 

Similarly, Robinhood will automatically reinvest any earned dividends on stocks or ETFs when you activate Dividend Reinvestment (DRIP) in your account, provided that its associated symbols promote a fractional share trade.

Commissions and Fees

How Robinhood makes money

It’s a free service for Facebook (FB). In order to avoid charging a membership charge, money is generated through gathering your user information and selling advertisements. In the case of Robinhood, it is also a free service. 

However, Robinhood will sell your order flow (the right to complete your transaction) to wholesale market makers instead of selling advertising. Robinhood is thus not really free. In the world of $0 trading today, almost all brokers except Fidelity have the same practice of taking money for order flows (PFOF).

Robinhood Gold

Robinhood Gold was a bad bargain in our tests. It costs $5 per month to receive Morningstar reports, streaming quotations for Level II, and margin trading (which charges 5 percent annual interest). 

Competent TD Ameritrade, E*TRADE, and Charles Schwab charge greater margin rates but provide much superior inventory research, commercial tools, client support, etc., for the same $0 per inventory market pricing.

Futu Moomoo

Top 7 Best Apps To Trade Stocks - Futu Moomoo Mobile App
Futu Moomoo Mobile App

Moomoo is another excellent Robinhood option. This is an excellent trading platform if you’re looking for clever trading in depth. It provides both novice and experienced traders outstanding trade tools and possibilities, including sophisticated charting, pre-and post-market trading, worldwide business, research and analysis tools, and most popular free Level 2 quotations.

Who is MooMoo for?

Moomoo has been developed as a smart trading platform, and investors may also benefit from cheap costs.

This mobile trading platform has effectively structured its sophisticated features in 1 app. For novices and seasoned traders, it is free and simple to use. A range of research tools may help you make intelligent investments. 

There is also a paper trading function with real-time data if the investing experience is to be simulated before all things are done.

When it’s convenient for you, Moomoo enables you to invest. You can start trading whether you travel or go home by synchronizing personalized settings on various devices. Moreover, no minimum deposit is available to establish an account.

Features

Advanced charting

Moomoo offers personalized amazing graphical capabilities, including basic graphics like bars, hollow candles, full candles, lines, mountains, and sophisticated multigraphs with more than 50 technical indicators, including the VWAP that can even please day traders. All-time periods are available from 1 min, 5 min, to 1 year.

Smart orders

It offers access to advanced stock orders for pre and post-market trade, including stop-limit orderings and trailing stop-loss orders and up to 40 transactions simultaneously.

Longer trading hours

Moomoo does have the longest time to trade with rivals. You may hop back and forth once the news releases from 4 AM until 8 PM EST.

Commission Fees

Moomoo commission rates for your US, Singapore, and Hong Kong businesses are among the most competitive prices available. Moomoo charges, for example, just 0.03 percent of the transaction value for SGX equities and US$0.0049 for US stocks.

At a minimal commission charge of €0.99 for US inventory, HK$3 for HK inventory, and €0.99 for SG inventory, even lower than those of Tiger Brokers and Interactive Brokers (IBKR). 

A minimum price of US$1.99 for US stocks is charged for Tiger Brokers, whereas the IBKR charges at least US$1 for U.S. stocks and US$2.50 for Singapore stocks.

SoFi Automated Investing

Top 7 Best Apps To Trade Stocks - SoFi Mobile App
SoFi Mobile App

In terms of stock market brokerages, SoFi Invest is one of the top options for first-time investors. 

Even though SoFi’s app is less feature-rich than some of its larger competitors, this also makes it easier to browse and comprehend if you don’t have a lot of prior expertise in the financial markets.

Who is SoFi Automated Investing for?

SoFi Invest is the ideal option for first-time investors. Who are seeking a straightforward method to get start in the world of investing. 

SoFi does not need a minimum deposit to establish an account. So, even if you don’t have a lot of money to invest, you may get start with SoFi.

If you already have other SoFi accounts, SoFi Invest is a fantastic alternative to consider. This is due to the fact that SoFi makes it quite simple to transfer money between SoFi Money and SoFi Invest accounts.

Features

Broad range of low-cost investments

SoFi clients can choose from ten different portfolios based on their risk tolerance and investment objectives. 

Each portfolio comes with a diversified selection of low-cost exchange-traded funds (ETFs). That provide exposure to U.S. stocks, developed international stocks, emerging markets, high-yield bonds, and Treasury bonds.

Budgeting and financial planning

SoFi is a standout in this category. All clients get unrestricted access to the financial advisors employed by the firm at no additional cost. 

A fiduciary standard, which requires them to act in their best interests, applies to these advisers. Who are Certified Financial Planners (CFPs) with the Series 65 certification (or comparable qualification). 

They are also noncommissioned advisers, which means that they do not get any compensation for recommending certain trades or activities.

Savings with a high rate of return

SoFi provides a high-interest savings account, similar to those offered by competitors Wealthfront and Betterment. 

SoFi Money is a checking and savings account that pays 0.25 percent interest yearly and is insured up to $1.5 million by the Federal Deposit Insurance Corporation (FDIC), which is six times more insurance than the average bank account. 

It also has no account fees and provides an unlimited refund for ATM costs each month, which is a rare find these days.

Fee and Commission

SoFi Invest makes much of the fact that it charges no yearly management fee. On the surface, this appears to be a highly attractive alternative to its competitors. 

In comparison, Vanguard Digital Advisor, a fully automated Robo, charges about 0.15 percent of assets under management. While the cheapest level of service on Ellevest is $12 per year, according to their website. 

In addition, those rivals either do not provide access to financial advisors or charge a premium for that service if they do.

Fidelity

Top 7 Best Apps To Trade Stocks - Fidelity Mobile App
Fidelity Mobile App

Fidelity Investments continues to grow and develop as a key player in the online brokerage industry. 

For the second year in a row, Fidelity’s brokerage service earned the top overall ranking in Best Online Brokers Awards. As the company has continued to improve important components of its platform. While simultaneously committed to decreasing the total cost of investing for clients.

Who is Fidelity for?

Fidelity, being one of the largest brokerage firms in the United States, geared to cater to the needs of the great majority of individual investors. 

When it comes to the ordinary buy-and-hold investor, Fidelity’s fully-rounded platform provides a large variety of tools. Moreover, research resources, and other resources, as well as a simple order entry process. 

Fidelity provides Active Trader Pro, a downloadable application that includes streaming real-time data. Moreover, a customized trading interface for more active investors and full-time traders. 

Despite the fact that Fidelity has comprehensively covered these two main areas. It is crucial to highlight that the company does not presently provide commodities or futures options.

Features

Mutual Fund Evaluator

The Mutual Fund Evaluator investigates each fund’s features in great detail. Although it has a tendency to direct users to Fidelity funds, this is not surprising given the platform’s design.

Options Screeners

The scanners powered by LiveVol include some built-in scans. As well as the possibility to make a custom scan if that is what you like. 

If you use Active Trader Pro, you’ll have 26 predefined filters to discover options trading opportunities based on volume. Moreover, open interest, option contract volume (including volatility differentials), earnings (including dividends), and other factors. 

A total of about 200 different criteria used to construct bespoke displays for you.

Fixed Income Screeners

Using the bond screener, fixed-income investors may weed out the approximately 120,000 secondary market securities. Those are now accessible based on a number of criteria, and they can then construct a bond ladder. 

The yield table updates every 15 minutes and is based on real-time information. Although this scanner is versatile, the interface is not at all user-friendly.

Tools and Calculators

Fidelity provides a variety of tools and calculators to help you with anything from budgeting to evaluating your investing plan. 

The Tools and Calculators page displays them all at once. They allow you to choose from a lengthy list of around 40 options. 

One of the most important tools is a hypothetical trade tool. It illustrates the impact on your portfolio of a hypothetical buy or sells in the future.

Fee and Commission

In addition to zero trading charges and a variety of more than 3,400 no-transaction-fee mutual funds. 

Fidelity also provides superior research tools and a cutting-edge trading platform. The fact that it offers zero-fee index funds and has a stellar reputation for customer service is just frosting on the cake.

Top 7 Best Apps To Trade Stocks – Quick Summary

Knowing the best apps for trading stocks is not enough. We have reviewed each and every best trading app in detail above. However, to quickly summarize the main points of every trading app we have devised a table.

Please keep in mind that it is possible not every app allows you to trade in crypto. Moreover, the same goes for the stocks and options. So, here is a quick summary of our review and you can easily make your decision based on it.

NameCan Tade stocksCan Trade OptionsCan Trade CryptoCost per Option Contract
WeBullYesYesYes$0
E*TradeYesYesNo$0.65
eOptionYesYesNo$1.99 + $0.10 per contract
RobinhoodYesYesYes$0.002
Futu MoomooYesYesNo$0.65
SoFi InvestYesNoYesNo Options Traded
FidelityYesYesOnly Bitcoin$0.65
Summary of Best Trading Apps in 2021

The Bottom Line

Beginner investors should seek online trading Apps that are simple to use, have extensive instructional resources, and have top-notch customer service. Moreover, charge minimal fees, and require small minimum account balances, among other characteristics. 

In our Best Trading Apps for stocks review, we select E*Trade as the winner because of its user-friendly interface. Moreover, emphasis on online education, and comprehensive trading simulation capabilities.

How To Use Binance Trailing Stop?

If you are new to Binance trading App, the Binance Trailing Stop will help you protect gains to maximize your profits.

In this step by step tutorial, you will learn how to easily take advantage of this feature to help grow your trading account.

What is Binance Trailing Stop?

When the market swings, a trailing stop order enables traders to put a pre-determined order at a certain percentage distant from the current price.

Trading using trailing stop orders enables traders to place an order at a predetermined percentage away from the market price when the market moves in their favor. 

It assists traders in limiting their losses and preserving their profits when a transaction does not go in the direction that traders deem unfavorable at the time of the deal.

When the price advances in a favorable direction, the trailing stop moves by a predetermined percentage (called the Callback rate). 

By allowing a transaction to stay open and profitable for the duration of time that the price is going in the direction that traders want, it locks in profits. 

The following stop does not reverse direction and does not go backward. Whenever the market price changes in the other direction by a preset percentage (Callback rate), the trailing stop will close/exit the position at the current market price.

How To Use Binance Trailing Stop?

In reality, the trailing stop order feature is only available in the Futures part of the Binance platform.

Furthermore, you must take advantage of the updated version of the Website. However, trailing stop orders only supported by the most recent version of the trading interface.

If you are now seeing the Old Version, you must click on the icon labeled “New Website,” as shown in the illustration below.

How To Use Binance Trailing Stop - Binance Trading USer Interface
Binance Interface

How to Enable Trailing Stop Order?

As soon as you get to the New Website, you must place your cursor over the triangle next to “Stop Limit” and choose “Trailing Stop.”

How To Use Binance Trailing Stop - Select Trailing Stop on the Trading App
Select Trailing Stop

As you can see in the screenshot below, things have changed.

How To Use Binance Trailing Stop - Select Trailing Stop
After Selecting Trailing Stop

How Does Binance Trailing Stop Works?

Traders may put a trailing stop order when initiating a trade for the first time, but this is not the usual practice. 

The trailing stop order may also put as a reduce-only order with the goal of decreasing or closing an open position, as well as other things.

In the case of a LONG trade, a sell trailing stop order you should place the order above the point of entry into the trade. The trailing stop price rises by a trailing percentage point each time the trailing percentage point reached (Callback rate).

When the price begins to rise, a new trailing stop price will establish. When the price falls, the trailing stop becomes immobile and does not move anymore.

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If the price travels more than the preset callback rate from its peak price and hits the trailing stop price, a sell order will issue. The transaction will complete with the execution of the sell order at the current market price.

A “buy” trailing stop order is the inverse of a “sell” trailing stop order in terms of functionality.

In the case of a SHORT trade, a purchase trailing stop order will placed below the entry point of the transaction. The trailing stop price decreases by a percentage of the trailing percentage (Callback rate).

When the price begins to drop, a new following stop price will establish.

When the price rises, the trailing stop becomes inactive and stops moving.

If the price advances more than a specified callback rate from its lowest price and reaches the trailing stop price, a purchase order will issue. It will be necessary to close this transaction with a purchase order at market price.

How To Use Binance trailing Stop - A sell trailing stop order for a long trade
A sell trailing stop order for a long trade

Callback Rate

The extent to which a trailing stop price will lag the price is determined by the callback rate. The “Callback Rate” box allows you to manually enter a rate in the range of 0.1 percent to 5 percent. The rate range is accessible from 0.1 percent to 5 percent. 

Alternatively, fast choices such as “1 percent” and “2 percent” are accessible for choosing in a short amount of time.

Activation Price

Market participants have the option of filling in the price level that activates the trailing stop. 

If no activation price is available, the market price will use as the default activation price (which may be either the “Last Price” or the “Mark Price” depending on the trigger type selected).

For a purchase trailing stop order (SHORT POSITION) to be successful, it must be placed with an activation price that is less than the current market price.

In order to satisfy the requirement, the market’s lowest price must hit the activation price at the same time. Unless the price falls below the Activation Price, the Trailing stop order will not activate and will not function.

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In contrast (LONG POSITION), in order to place a sell trailing order, the activation price must be greater than the current market price at the time of the order.

In order to satisfy the requirement, the highest price on the market must be more than the activation price. If the price does not rise over the Activation Price. The Trailing stop order will not activate and will remain inactive.

It is necessary to utilize the activation price in order to begin trailing stop loss/take profit only when a price condition is reliable.

In order to safeguard your trade in the event that the trailing stop loss does not satisfy your Activation price condition. If you place an Activation price order, you will almost certainly need to put a Stop loss order as well.

Reduce only-trigger

It is usually self-evident that the trailing stop loss happens to reduce or close your trade. Rather than to create a new position when you utilize it. As a result, in the Advanced section, you must enable the flag “decrease only-trigger.”

In my opinion, it might be helpful as a default flag, but in reality, it is not!

Advanced features include the reduce-only trigger flag as well as the kind of trigger (Last Price and Mark Price)

How To Use Binance Trailing Stop - Advanced: reduce-only trigger flag and type of trigger (Last Price and Mark Price)
Advanced: reduce-only trigger flag and type of trigger (Last Price and Mark Price)

The type of trigger

For the trigger, traders may choose between the “Last Price” (the default) or the “Mark Price” option. 

If traders choose “Mark Price” as a trigger, the trailing stop will triggered when the Mark Price reaches or exceeds the activation price. Even if the Last Price does not reach the activation price at that time.

Please keep in mind that Binance utilizes the Mark Price as a trigger for liquidation. As well as a metric for calculating unrealized profit and loss. 

The Mark Price is usually just a few cents more than the Last Price at the time of purchase. During periods of severe price fluctuation, the Last Price.

On the other hand, may vary substantially and significantly from the Mark Price. 

As a result, please keep an eye on the price difference between the Last Price and the Mark Price.

If you would want to alter the Trigger from Mark Price to Last Price or vice versa. You may always cancel the order you have made and make a new order to replace it.

Conditions Associated with Trailing Stop

Please keep in mind that there are two criteria for the activation of the trailing stop order. Which are the activation price and the callback rate. 

Both of these conditions must meet in order for the trailing stop order to activated and issued as a market order to close or exit the position.

A sell trailing stop order (LONG TRADE) will be placed if the conditions are met as follows:

  • Activation Price <= Highest Price and
  • Rebound Rate >= Callback Rate

A buy trailing stop order (SHORT TRADE) will be placed if the conditions are met as follows:

  • Activation Price >= Lowest Price and
  • Rebound Rate >= Callback Rate

How Trailing Stop Differs From Trailing Loss Order?

Using a stop-loss order to assist minimize losses, while using a trailing stop order to lock in profits while also limiting losses is beneficial.

However, unlike trailing stop orders, which are more flexible and follow the direction of the market automatically. Stop-loss orders are fixed and must be manually adjusted.

How to Use Binance Trailing Stop – Pro-Tip

Calculating the optimum callback rate and activation price may be challenging.

To be successful, a trailing stop should have a callback rate that is neither too low nor too high and an activation price that is neither too near nor too far away from the current price. 

I show You how To Make Huge Profits In A Short Time With Cryptos!

When the callback rate is set too low or the activation price is set too near to the entry price. The trailing stop gets too close to the entry price and easily trigger by typical daily market fluctuations. 

There is no space for a transaction to swing in a trader’s favor prior to any significant price movement.

The transaction will close/exit at a time when the market has had a brief drop. And subsequently rebounded, resulting in a loss.

So, this was all about how to use Binance Trailing Stop. If you have anything in mind relating to Binance Trailing Stop, feel free to share with all of us.

Is Betterment Investing Worth It in 2021 ?

What Is Betterment Investing

Wondering about what is Betterment Investing? You have come to the perfect place.

Betterment is one of the pioneer Robot advisors, having begun in 2008 with an aim to make investing less expensive and difficult for everyone. 

Betterment has been one of the most popular robot-advisor platforms for more than a decade, competing directly with Wealthfront, one of a rising number of automated investment alternatives.

Betterment Investing – Quick Summary

Betterment being one of the best Robot-advisors has a lot of benefits, and features. Let’s take a look at some of the distinguishing aspects of Betterment in the table below:

Minimum Investment$0
FeesDigital – 0.25%/year; Premium – 0.40%/year
Accounts• Taxable
• Joint
• Traditional IRA
• Roth IRA
• Rollover IRA
• SEP IRA
• Trusts
• Non-Profit
• 401(k) Guidance
401(k) Assistance
Tax Loss Harvesting
Portfolio Rebalancing
Automatic Deposits✔ Weekly, Biweekly and Monthly
AdviceHuman Assisted
Socially Responsible
Fractional Shares
Customer ServiceMonday to Friday from 9:00 am-6:00 pm (ET)
Betterment Investing Features and Amenities

Who Should Use Betterment?

If you want to start serious about saving for anything substantial, such as a home down payment, student fund, or your own retirement, Betterment is an excellent choice of the automated investment adviser. 

A portfolio of low-cost exchange-traded funds (ETFs) and mutual funds is designed by Betterment’s algorithms to fit your risk tolerance and particular objectives. 

Betterment, in contrast to Wealthfront, does not need a minimum initial investment to get start with the platform.

There are two levels of Betterment service accessible to clients with balances greater than $100,000: Betterment Digital and Betterment Premium, both of which offered as an option for consumers with balances greater than $100,000. 

Annual management fees charged by Betterment Digital and Betterment Premium are 0.25 percent and 0.40 percent, respectively. Betterment’s team of financial advisors will provide you with limitless, complimentary services if you choose to upgrade to a higher service tier.

In addition to selecting the appropriate investment portfolio for each of your goals, setting up an account is quite easy. Improve your investment performance with financial advice from a financial professional. 

Betterment Digital users may purchase a 45-minute coaching session with a financial professional for $199, while Betterment Premium customers receive financial advice at no additional cost.

How Does Betterment Work?

Who should use betterment investing - What Is Betterment Investing
Betterment Investing App

You begin by providing Betterment with some basic personal information, such as your age, salary, and Social Security number. 

Then you choose one or more financial objectives, such as putting money aside for an emergency fund, long-term investing in a taxable account, or saving for retirement in an IRA (IRA). Traditional IRAs, Roth IRAs, and SEP IRAs are all options for you.

After linking your external bank account to the platform, you may fund your account by setting up one-time or regular deposits.

Betterment offers you a menu of tailored investment portfolios for each aim once you have entered your personal information and selected your objectives. 

Improvement Portfolio” is the name to the default portfolio, which consists of exchange-traded funds (ETFs) representing around a dozen asset types.

Investing in socially responsible investments is available in six different portfolios (SRI). According to the type of objective you are saving for, the composition of each fund will vary. 

If you’re seeking to save for retirement, Betterment will typically recommend that you invest in more equities. Bonds would make up the majority of your portfolio if your objective is to invest your emergency money.

Betterment’s Approach to Investing Your Money

How Betterment Invest your money - What Is Betterment Investing
Betterment Dashboard

As part of its investment portfolio diversification strategy, Betterment utilizes a plethora of low-cost exchange-traded funds (ETFs) that track established indexes. 

However, depending on your profile and objectives, you may allocate to as many as 12 asset classes, depending on your situation.

According to your objectives, the exact asset allocation you receive, or the percentage of your portfolio that goes into each fund, defined by your assets allocation. 

In the case of an emergency fund portfolio, which contains money that needed in the event of unexpected financial troubles, equities account for around 15% of the portfolio and bonds account for 85%. 

For a 35-year-old investor, a general investing fund comprises 90 percent equities. This is money that will not be needed for a long time.

The risk tolerance of some rival Robo-advisors is determined by a series of questions you answer. Betterment creates the basic Betterment Portfolio, which is the default pick for the average investor based on your age, income, and investment objectives. 

The majority of their money will direct toward equities, with the allocation divided across asset classes such as large-cap U.S. stocks, large foreign companies, and so on, for that 35-year-old.

In addition to the Betterment Portfolio, the platform distinguishes itself from other Robo-advisors by providing you with a variety of bespoke portfolio alternatives to pick from:

Socially Responsible Investing

Environmental, social, and governance (ESG) aspects are screened out of companies when investing in Betterment’s SRI option, which invests in ETFs using benchmarks that screen out companies that are not ESG.

Goldman Sachs Smart Beta

To aim to achieve outsized returns while keeping expenses down, this portfolio employs various diversification methods in an attempt to do so.

BlackRock Target Income

A well-diversified bond fund for investors who wish to produce a consistent source of income over the long term.

Flexible Portfolio

The asset class weightings given to you in the default Betterment Portfolio can be customized using this option.

While the Betterment Portfolio is mostly comprised of low-cost Vanguard and BlackRock iShare offerings, the Socially Responsible, Smart Beta, and Target Income portfolios all employ ETFs with greater expense ratios than the default Betterment Portfolio.

In addition, you may link additional accounts, such as your 401(k) or outside IRA, and Betterment will estimate how close you are to meeting your retirement objectives.

Key terms of Betterment You Need to Know

Robo-advisor

Betterment is a Robo-advisor, referred to as an automated investment service or an online adviser in some circles. 

Robo-advisors, who utilize computer algorithms and smart software to design and manage your investment portfolio, is far less expensive than hiring a human, are a financial advisor to meet with you in person.

Fractional Share

Investors can acquire stock or other assets based on a dollar amount they choose rather than the price of a complete share when they purchase fractional shares of stock or other investments. 

This may be especially helpful for investors who are dealing with a small amount of money. But who want to construct a portfolio that is highly diversified. Betterment purchases fractional shares, ensuring that there is no cash available in your portfolio.

Tax-loss Harvesting

Investing in tax-loss harvesting is a technique that can help you minimize your capital gains taxes considerably. 

It is common practice in taxable accounts to sell failing assets in order to offset the profits from winning investments. 

Betterment offers tax-loss harvesting, but it does not offer stock-level tax-loss harvesting (also known as direct indexing), offered at Wealthfront and Personal Capital, among others. 

Some investors may be able to save even more money on taxes by using direct indexing.

Expense ratio

An expense ratio is a fee imposed by mutual funds, index funds, and exchange-traded funds (ETFs) that is calculated as a percentage of your investment in the fund. 

For example, if you invest in a mutual fund with a 1 percent cost ratio. You will have to pay the fund $10 each year for every $1,000 you have invested. 

These costs, if they are excessive, can have a substantial impact on the performance of your portfolio. But the expense ratios of the funds utilized in Betterment portfolios are modest.

The expense percentages are payable in addition to the management fee that Betterment charges.

Fees and Expenses Associated with Betterment

Customers who simply use digital services pay 0.25 percent in management fees per year. With the price increasing to 0.40 percent per year if they subscribe to the premium plan. 

The digital charge for Betterment assets above $2 million may reduce to 0.15 percent per year. Specifically, on the part of the balance that exceeds $2 million. 

You will have to pay 0.30 percent of the sum over $2 million if you choose the premium plan. The underlying ETFs are subject to annual management fees ranging from 0.07 percent to 0.15 percent.

Even though you may use Betterment’s financial planning and account consolidation features without paying a fee. You can shift a portion of your funds into an investment account on a regular basis.

There are no costs relating to canceling an account, sending a cheque, or sending a transfer.

  • The Monthly cost to manage a $5,000 portfolio: $1.04 ($1.67 for Premium)
  • Monthly cost to manage a $25,000 portfolio: $5.21 ($8.33 for Premium)
  • Monthly cost to manage a $100,000 portfolio: $20.83 ($33.33 for Premium)

How to Cancel Betterment Subscription?

In order to close your Betterment account, follow these instructions:

  • Log in from a web browser
  • Select “Settings”
  • Tap on “Accounts”
  • Click on the three dots to the right of the specific investment account(s) you wish to close.

Pros

  • Account creation is quick and simple.
  • Portfolios are completely transparent before funded.
  • It is possible to link external accounts to individual goals.
  • You may create a new goal at any moment and keep track of your progress with relative simplicity.
  • Change the risk level of your portfolio or move to a different type of portfolio with relative ease.
  • A two-way sweep is available through the checking and cash reserve functions.

Cons

  • Planners are continually persuaded to finance a Betterment account.
  • The basic package charges $199–299 for financial planning.
  • Socially responsible portfolios use ETFs (ETFs).
  • No margin lending, secured loans, or portfolio borrowing alternatives.

Conclusion

It is possible to utilize Betterment in a variety of ways. You may sync all of your financial accounts to obtain an overall view of your assets without investing. You can invest in one of their portfolios, or you can construct a Flexible Portfolio. Based on some of your own criteria. 

When it comes to taxable accounts, the goal is to optimize after-tax returns through the use of tax-loss harvesting. Moreover, portfolios may rebalance as needed. 

Betterment is primarily a goal-oriented platform. Moreover, users have access to a wide range of planning tools as well as a plethora of knowledge and guidance.

10 Best Cheap SPACs to Buy in 2021 – Easy Guide

SPAC

Many investors have shied away from SPACs in the past, believing them to be excessively risky. To explain the risk, benefits, and reliability of SPACs, we will discuss the 10 Best Cheap SPACs to Buy in 2021.

Moving forward, first, we’ll take a look at what is SPACs, and how they can be beneficial for investors.

What is SPAC?

A special purpose acquisition company (SPAC) is a corporation with no commercial activities, created only for the purpose of raising funds through an initial public offering (IPO) for the purpose of purchasing an existing corporation. 

SPACs, often known as “blank check companies,” have been in existence for several decades. 

In recent years, they’ve gained in popularity, drawing high-profile underwriters and investors, and raising a record amount of money through initial public offerings (IPOs) in 2019. 

Over 50 SPACs established in the United States so far in 2020, with a total raised of $21.5 billion as of the beginning of August.

What Makes SPAC Popular?

SPACs are often created by investors or sponsors that have specific knowledge or experience in a certain industry or business sector, with the goal of pursuing transactions in that industry or business sector. 

If the founders of a SPAC have at least one acquisition target in mind when forming the company, they may choose not to disclose that target throughout the IPO process in order to avoid lengthy disclosures during the process. 

(This is why they referred to as “blank check businesses,” because IPO investors have no clue which firm they will be investing in at the end of the process.) Before issuing shares to the general public, SPACs look for underwriters and institutional investors.

The money that SPACs raise through an initial public offering (IPO) is deposited in an interest-bearing trust account. These funds may use to complete an acquisition or to refund the money to investors if the SPAC gets liquid. 

They cannot be used for any other purpose. A SPAC typically has two years to execute a transaction or else it will be forced to liquidate.

In some circumstances, a portion of the interest produced by the trust might be utilized to supplement the operating capital of the SPAC. The stock of a SPAC is typically listed on one of the main stock markets following the purchase of the company.

How Do SPACs are Beneficial for Investors?

10 Best Cheap SPACS to Buy in 2021 - How Do SPACs are Beneficial for Investors?
Benefits of SPACs
  • Produces greater results than the typical initial public offering (IPO)
  • It comes with a predetermined time limit attached to it.
  • It allows for a more favorable pricing structure inactive structures, allowing the target company’s sponsors to raise funds on more favorable terms, distinguishing itself from standard initial public offerings (IPOs).
  • When a company goes public, it expedites the process of becoming publicly traded.
  • To raise valuations and funds.
  • It allows you greater control over the terms of the transaction.
  • SPAC is subject to less regulatory monitoring.
  • SPAC makes it possible for high leverage companies to go public, which would otherwise be impossible with an IPO.

Downsides of SPACs

It is found that the target coup’s value has been considerably reduced since the SPAC structure is less hazardous for the business trying to go public, which makes it riskier for SPAC itself because they are paid with larger discounts than they should be.

According to the definition of a blank check company, the investors are simply providing funds with no knowledge of which company would be the target for the money they have invested in.

If the company attempts not to meet the expectations of the investors and as a result, the investors decide to withdraw their money, there may be a conflict of interest.

The fees and charges included in SPAC entail underwriter’s fees as well as additional costs, which may be more than the amount paid to investment bankers in an initial public offering. 

The target company’s operations are subject to less scrutiny than they would otherwise be.

Risks Associated with SPACs

Those that combine with SPAC and go public expose to less scrutiny than companies that go through the standard initial public offering (IPO) procedure. 

When it comes to attracting investors and raising cash, there is always the potential of misrepresenting investment opportunities.

Sponsors of special purpose acquisition companies (SPACs) might profit from an acquisition even if the investors are unsuccessful in their endeavors. 

Conflicts of interest and fraud are major risks in this situation, which can arise from the misappropriation of funds as a result of misrepresentation or omission of the company’s prospects.

SPACs are subject to market fluctuations, which can be dangerous because investors do not view these fluctuations as a benefit to the investment

For example, a unit of the SPAC with a price of 10$ may fluctuate, and investors may be hesitant to purchase at a higher price if the price of the unit rises.

10 Best Cheap SPACs to Buy in 2021

The following are the 10 best cheap SPACs you can buy in 2021:

SPACsDate of IPOPrice
Altitude Acquisition CorporationDecember 2020$9.79
RedBall Acquisition CorporationAugust 2020$9.78
Lefteris Acquisition CorporationOctober 2020$9.79
Dune Acquisition CorporationDecember 2020$9.77
Burgundy Technology Acquisition CorporationOctober 2020$9.89
Soaring Eagle Acquisition UnitsMarch 2020$9.97
Rush Street Interactive (RSI)December 2020$14.88
Canoo Inc. (GOEV)August 2020$7.21
Clever Leaves CLVRDecember 2020$9.26
Rodgers Silicon Valley Acquisition (RSVA)December 2020$15.67
Top 10 Cheap SPACs in 2021

Altitude Acquisition Corporation (NASDAQ: ALTU)

Altitude Acquisition Corp. (NASDAQ: ALTU) is a special purpose acquisition company based in Georgia that conducts business internationally. 

The company went public in December 2020, and it was able to generate over $300 million in its first public offering, according to the company. 

It focuses on mergers and acquisitions with companies in the tourism and technology industries. Gary Teplis serves as the company’s chief executive officer.

NASDAQ: ALTU) has a market value of more than $366 million, making it the largest company in the world. The stock’s 52-week price range is $9.6 to $14.4, with a midpoint of $9.6. The company is still on the lookout for a merger opportunity.

RedBall Acquisition Corporation (NYSE: RBAC)

RedBall Acquisition Corp. (NYSE: RBAC) is a special purpose acquisition company located in New York with a focus on acquisitions of businesses.T

his year, the corporation went public in August, earning more than $575 million in its first public offering. 

The business primarily focuses on mergers and acquisitions involving firms in the sports, media, and data analytics industries in the United States of America.

RedBall Acquisition Corp. (NYSE: RBAC) is a publicly-traded company with a market value of more than $704 million. Alec Scheiner is the company’s chief executive officer. 

The price range of the company’s shares over the past 52 weeks has been between $9.7 and $12.4. The stock has an average daily trading volume of 220,868 shares. The special purpose company is still looking for a contract to combine with another company.

Lefteris Acquisition Corporation (NASDAQ: LFTR)

Lefteris Acquisition Corp. (NASDAQ: LFTR) is a special purpose acquisition company based in Boston that acquires businesses for a variety of purposes. 

In addition to initial public offerings in the financial technology industry, the business also provides advisory services. 

It went public in October 2020 and raised more than $207 million in the first public offering of the company. Karl Roessner is the company’s chief executive officer.

Lefteris Acquisition Corp. (NASDAQ: LFTR) is continuing on the lookout for a suitable merger partner. The stock’s price has fluctuated between $9.6 and $12.4 during the past 52 weeks. 

The stock has an average daily trading volume of 66,452. Morgan Stanley has the left-hand position on the special purpose company. The firm has a market value of $252 million, according to the latest available data.

Dune Acquisition Corporation (NASDAQ: DUNE)

Dune Acquisition Corporation - 10 Best Cheap SPACs to Buy in 2021
Dune Acquisition Corporation’s Logo

A special purpose acquisition business based in Florida, Dune Acquisition Corporation (NASDAQ: DUNE) is a special purpose acquisition company. 

A merger with another company in the software as a service industry is something the company is looking to do in the future. 

It went public in December 2020 and raised more than $172 million in the initial public offering (IPO) that month. Carter Glatt is the company’s chief executive officer.

A merger was sought by Dune Acquisition Corporation (NASDAQ: DUNE) in order to enable the company’s first public offering. 

The stock’s 52-week price range is between $9.5 and $10.2, and it is now trading at $9.5. It has a monthly average volume of 35,153 copies printed. 

With a market value of $131 million, the company is reliable. At Cantor Fitzgerald, the left-leaning partner is in charge.

Burgundy Technology Acquisition Corporation (NASDAQ: BTAQ)

Burgundy Technology Acquisition Corporation (NASDAQ: BTAQ) is a Cayman Islands-based special purpose acquisition corporation with headquarters in New York City. 

This year, in August 2020, the firm went public and raised more than $345 million in its first public offering (IPO). It seeks to combine with companies operating in the technology industry that headquartered in Europe, the United States, or Israel. 

It has a market value of around $436 million at the time of writing. Leo Apotheker serves as the company’s chief executive officer.

Burgundy Technology Acquisition Corporation (NASDAQ: BTAQ) is still on the lookout for a strategic partner to combine with. 

Its 52-week price range is $9.6 to $11.9, with a low of $9.6 and a high of $11.9. It has an average volume of 209,441 units each month. 

The corporation is actively watching the development of cryptocurrency companies, and it may seek to combine with one of them in the next weeks and months.

Soaring Eagle Acquisition Units (SRNGU)

Soaring Eagle Acquisition Units - 10 Best Cheap SPACs to Buy in 2021
Soaring Eagle Acquisition’s Logo

Because of its impressive track record, Soaring Eagle Acquisition Corp Units is ranked first. These units allow the bearer to one share as well as one-fifth of a warrant to purchase additional shares at $11.50 per unit. 

However, while the modest warrant ratio is less attractive than many we saw last year, this team has successfully introduced both DraftKings (DKNG). 

Report to the public through prior SPACs. Those have been two of the most successful SPACs in terms of overall performance. 

They also demonstrated a great ability to identify promising brands in the online gaming and sportsbook market. Which is likely to stay profitable for the foreseeable future. 

Given the fact that DraftKings and Skillz have both recently entered the market, it may take some time for them to identify their next acquisition, but this is one situation in which SPAC investors should exercise patience.

Rush Street Interactive (RSI)

The financial results released by Rush Street Interactive earlier this month demonstrated that this company is a legitimate contender in the online gaming industry. 

The fact that investors are concentrating their efforts on Penn National (PENN) – Get Penn National Gaming, Inc. Report and DraftKings, as well as the heritage casinos, indicates that this industry will produce several winners.

RSI reported a loss of one cent per share but given that Wall Street had expected a loss of $0.32. This is a significant improvement in the bottom line. 

The company’s revenue of $100 million is also above analyst expectations of $94.37 million. This indicates a 260 percent increase in revenue over the previous year. 

Although the company is still investing in customer acquisition, real money monthly active users (MAUs) have increased by 116 percent year over year. And by 22 percent sequentially, with RSI ranking as the number-one online casino in the United States. Based on gross gaming revenue in the most recently completed quarter. 

And, with $225 million in cash on hand, the company is well-positioned to continue advertising and promotions, which will help to develop their brand and solidify their users’ relationships. 

RSI forecast revenues of $440 million in 2021, compared to forecasts of $372 million. This represents sustained robust growth of 58 percent for the whole year, according to the company.

Canoo Inc. (GOEV)

Canoo Inc - 10 Best Cheap SPACs to Buy in 2021
Canoo Inc Logo

Canoo unveiled its all-electric pickup truck earlier this month, and although some people praised the design, others were less enthusiastic. Consider myself interested, because I believe it will attract a large number of consumers.

The company sells electric vehicles that are modular and purpose-built. It pioneered the development of the flattest and lowest-profile skateboard in the history of the sport. Because that is exactly what it is, think of it as a chassis. 

The fundamental methodology provides for a wide range of application flexibility as well as rapid time to market. Hyundai has previously entered into an agreement with Canoo to collaborate on the development of an electric vehicle platform. 

A new vehicle may get in as little as 18-24 months, rather than the traditional 3-5 years, according to the company’s website.

Canoo now earns money through the provision of engineering services. It expects revenue from this area of the business to reach $150 million in 2021, and $450 million by 2024, according to the company. 

It will launch its B2C platform in 2022, which expects to generate an additional $1.2 billion in sales by 2025, or a compound annual growth rate of 147 percent. 

Management estimates that the B2B platform will be available in the market by 2023, with revenue for this segment of the business reaching $700 million by 2025.

Clever Leaves CLVR

Clever Leaves, a vertically integrated cannabis company with operations in Colombia and, shortly, Portugal. 

The company provides low-cost GMP-certified pharma quality cannabis through its operations in Colombia and, soon, Portugal. 

Over the last several years, we’ve spoken with Village Farms (VFF – Get Village Farms International, Inc. Report management about these locations, and they’ve explicitly pointed out the difficulties that many cannabis players have had in entering into them.

Clever is not a licensed producer in Canada or a multi-state operator in the United States; rather, it is an MNO (multi-national operator). 

It has 1.8 million square feet of growing space in Colombia, and it is the only business in the region that has been certified according to Good Manufacturing Practices (GMP). As a result, it has risen to become the leading licensed producer in Latin America.

Rodgers Silicon Valley Acquisition (RSVA)

Rodgers Silicon Valley Acquisition, which included the acquisition of Enovix, may have ushered in a new era of powerful SPACs acquiring a business in a hot area. The PIPE priced at $14, despite the fact that the SPAC’s offering at $10.

Enovix is a company that designs and manufactures lithium-ion batteries. Enovix’s presentation on establishing a plan for future electric car battery manufacturing was indeed interesting. 

But it would be a mistake to ignore the computer industries that the company now serves with its patented 3D cell architecture, which it already supplies to. 

Enovix also involved in wearable technology, personal computers, augmented reality, virtual reality, and mobile communications, to name a few areas. 

As a whole, this company is much more than just electric vehicles, and investors should take heed of this.

Conclusion

In this comprehensive review, we had an insightful overview of the 10 best cheap SPACs to buy in 2021. Moreover, we have discussed what are the advantages and disadvantages of investing in SPACs.

Make sure you read all the risks associated with SPACs before making your investment.