Proven Wealth Limited has launched a platform that allows Jamaican investors more options to live-trade US stocks at cheaper prices, becoming the second local broker known to offer such services.
“Customers are demanding this,” said Johann Heaven, CEO of Proven Wealth.
Proven cut its fees this month from US$130 to US$25 per trade for clients that utilise its new mobile US trading platform dubbed Proven Global Trading. The trades are routed through US provider Zacks Trade.
The reduced fee, which is still comparatively high, is meant to incentivise local investors to trade over shorter time horizons, enabling day trading and swing trading. The higher trading fees meant that investors would be more inclined to hold the stocks for the long term.
Heaven, who describes himself as a trader at heart, says that Proven recognised that local investors lacked the ability to trade US stocks at a moment’s notice.
“This is critical as it affects the return on your portfolio,” he said.
Proven Global allows real-time trading as well as access to research, news, financials, and technical indicators. The platform will initially allow trading on the US equities markets but will eventually spread to Asian and European markets. Proven will also facilitate margin lending.
Investors require a minimum of US$2,000 to seed their Proven Global accounts. It is part of an overall digital push by Proven that will follow its roll-out of an online app for local trading on the Jamaica Stock Exchange.
The other broker known to offer live trading is Alliance Investment Management Limited.
Alliance Investment also dropped its fees to live-trade US stocks from US$29 to about US$5 to $10 per trade. The reduction in fees comes with monthly charges and other costs. Alliance clients route trades through US provider Das, which supplies the software. Alliance was not reached for comment on its platform.
Most local brokers, including Stocks & Securities, trade US stock on behalf of their clients rather than offer live-trading.
“We tailor US portfolios based on the time horizons and liquidity of the client. We look at what’s best for them rather than allowing them to day trade and take on too much risk,” said Johnathon Khoury, CEO of SSL Jamaica Limited.
SSL charges roughly US$50 per trade, saying that the fee includes advisory services, research, and portfolio management.
The size of the Jamaican holdings in foreign stocks is unknown, but it appears to be growing, and even the Jamaica Stock Exchange is positioning for business.
The JSE will be adopting Nasdaq technology for its platform, a partnership that is expected to open up opportunities for local investors to trade foreign equities.
Nasdaq expects to list some 200 securities this year, led by technology companies with market capitalisation above US$1 billion called unicorns. Last year, it had 186 new listings. Additionally, between now and the first week in May, the New York Stock Exchange expects 15 new listings.
The US market is characterised by small and micro-cap stocks that offer big swings on a daily basis. Large cap stocks provide less volatility.
“The movement of these small-cap stocks can be large, but we like companies with strong fundamentals,” said Khoury, adding that the company was on watch for the listing of rideshare company Uber.