You Can Own a Piece of Amazon, Apple, Google or Tesla Through This Trading Platform
Many people would like to start investing their money in the stock market but don’t exactly know where to start. More seasoned investors have dipped their toes into the local exchange and would like to diversify their portfolio by including global tech giants like Amazon and Apple but don’t know how.
Gotrade is a new trading platform that is making both a reality for investors in the Philippines and elsewhere in the world.
What is Gotrade
Gotrade is a platform that makes it possible for investors to own a piece of American companies through fractional shares trading. Essentially, users can buy parts of shares in some of the U.S.’s biggest companies. The company works as an introducing broker to a Financial Industry Regulatory Authority-regulated (FINRA) U.S. intermediary (Alpaca Securities LLC). Through this broker, stock inventory is split into millions of fractions. A Gotrade user can then decide how many fractions to buy, or can set their budget and the app will automatically calculate the number of fractional shares they can afford through notional value trading.
For example, a user could buy $5 (0.01028807 shares) of Netflix or $5,000 (10.2880658 shares) of Netflix without having to do the calculation themselves. The transaction takes place seamlessly and in real time, although the trades execute only when the US market is open.
Users can search for specific stocks, or browse through categories from Tech Giants to Sport, Women in Charge, Gaming, and COVID-19-related listed companies. Once they click on a listing, a chart shows that particular stock’s recent price movement, as well as its market cap, dividend yield and more. Recent news flow from the company is also displayed. Clicking on any of these terms reveals a pop-up which explains the meaning of the term. From this page, users can buy or sell.
All fractional shares are shown on a user’s Portfolio page, where they can track performance, add companies to a Wish List, and sell shares they no longer wish to hold. When dividends on a share are paid, they go into the user’s account.
Gotrade’s model extends the protection offered by the Securities Investor Protection Corporation, which protects users accounts for up to $500,000, to users globally. And all money flows through counterparties regulated in Singapore (Rapyd) and the United States (Alpaca & First Republic Bank).
Founded in 2019 by David Grant, Norman Wanto, and Rohit Mulani, Gotrade’s mission is to remove the barriers and substantial costs involved with investing in US stocks. Historically, people who wanted to buy shares in the likes of Apple, Google, Disney and other major US companies would have had to have been based in the US—with a valid social security number—or had to pay stockbrokers a high commission. Investors are also put off by the high cost of a single share in some of the U.S.’s most popular companies. A single share in Amazon, for instance, trades at around $3,220 (P156,000), while Warren Buffett’s Berkshire Hathaway’s shares trade at around $422,000 (P20.44 million).
Gotrade’s makes it possible for investors to own a piece of the company by removing geographical boundaries for investing. It also does not charge commission and removes minimum deposit sizes. Users from 150 countries, including the Philippines, can buy fractional shares in global giants on the Dow Jones, S&P 500 and NASDAQ from as little as $1. For instance, if Facebook is trading at $100 per share, Gotraders can buy 1/100th of a Facebook share with that $1.
Instead of charging commission fees, Gotrade collects a small fee on the currency exchange from deposits, and any interest income generated from cash. The company says the app will always be free, but will be looking to add a premium paid subscription program in the future.
The app has seen stellar growth since its by-invitation only launch last May 15. Gotrade says over 100,000 users have signed up in the 13 weeks since launch purely by mostly through word-of-mouth and customer referrals.
In fact, Gotrade announced that it has raised $7 million (about P339.12 million) during a seed round funding, which the company plans to use to scale up the business and further product development including a strong focus on user education. The funding round was led by United Kingdom-based venture capital firm LocalGlobe. Others participating in the funding round include U.S. VC investor Social Leverage, Germany’s Picus Capital and Raptor Group as well as angel investors, which include siblings Lance and Lisa Gokongwei of Philippine conglomerate JG Summit.
“The US market is one of the greatest generators of wealth in history but access to it outside the United States remains out of reach for the vast majority of the world due to numerous barriers to entry,” said Mulani. “We’ve eliminated those barriers with fractional shares, no commissions, custody, inactivity or dividend fees and an intuitive user experience. Our mission is to make investing accessible for literally anyone—b that a first-time investor who needs a helping hand understanding jargon or a seasoned investor who has many years of experience under their belt.”