![]() ![]() UAE resident Karan Gurnani, who has been investing in the stock market for a few years. Traders also need to carefully read the agreement they signed with the share trading app as it “gives full legal rights to brokers to change the rules and trading conditions without any prior notice”, says Mr Kirbaj. ![]() “These apps are highly sophisticated tools that can be susceptible to technology failure, cyber attacks, hackers and disconnection.” “The safety of online brokers depends on many factors, including regulations, business type, software integration, execution and the safety of clients’ money,” says Mr Kirbaj. It is a safer option for investors to deal with fully regulated banks and brokers with reliable regulatory authorities, he says. The best way to trade is to use several platforms belonging to different regulatory authorities rather than rely on a single one, no matter how advanced it may be, says Chaddy Kirbaj, vice director at Swissquote Bank Dubai. Demand surged during the pandemic due to monetary easing by the US Federal Reserve and other central banks, putting more money into people’s pockets during the Covid-19 lockdowns. With retail investors increasingly seeking direct access to markets with the help of technology, online trading apps have become more popular. He says he has no regrets because he was willing to take a risk.Īkshay Nair, a UAE-based investment consultant who made a $65,000 profit in one week by trading in GameStop shares, says that a majority of customers using online trading platforms like Robinhood are very small retail investors who do not understand the risks well. ![]() It depends on the investor’s knowledge,” he says.Īlthough he reinvested about $20,000 of his profit in another tranche of GameStop and AMC shares, buying 100 shares each for about $94, the stocks have continued to fall, and he now plans to book his losses. “The platform itself is not safe or unsafe. Mr Nair says it is risky to engage in these trades without professional financial advice. They eventually make losses, especially in complicated products such as options,” he says. “These platforms provide huge leverage, so people bet more than they can risk. The platform said it limited trading in GameStop to boost its cash buffers and pay for clearing house deposits.Īkshay Nair, a UAE-based investment consultant who made a $65,000 profit in one week by trading in GameStop shares, agrees that a majority of customers using free trading apps are small retail investors who do not understand the risks. Robinhood has also drawn flak for restricting trading in GameStop shares and other heavily shorted companies, denying investors a chance to book profits. The recent GameStop trading frenzy is another example of how trading apps offer big risks and rewards, and raises questions about how safe share-trading apps are for stock-market investors. ![]()
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