Brokers are in the business of making money, like most businesses, that means that if they can make money off of you, then they will.
Things like Payment for Order flow and selling your trade data to create a composite man psychological profile exists. These result in a lumping and a basket of similar ‘like-minded’ investors trade patterns to which someone else can create a trade algorithm to trade off of.
Point, is, Brokers will sell your data or your information or even the ‘privilege of fulfilling your orders’ to other third party companies to make money off of you.
Brokers aren’t your friends.
And this particular reminder is to shed some light on some terms and conditions that Brokers have in their clauses in their long long list of terms and conditions that you sign up for.
Their Terms of Service (ToS) has a pretty clear standing in legal jargon that says they’ll sell your shit if they need to.
The short version is that you open yourself up to getting fleeced.
IBKR’s terms;
Basically, the Broker services are allowed to refuse you and liquidate your accounts for their own purposes. Meaning they’ll sell you out a drop of a hat if they want.
Here’s Revolut, another broker;
Just because the terms and conditions are ‘industry standard’ doesn’t mean that the Industry isn’t fucking you.
Robinhood;
Charles Schwab;
E-trade;
So,
Almost every terms of service has the clause that these Brokers reserve the right to do any actions that are in the best interest of the broker and to satisfy other shit. If they are on the hook for shares and it will cause them harm they can sell your positions.
Yea, if you know a little bit about recent history, then you’ll know that they might make you realize a loss whereas you could have had a gain. Brokers can prevent you from buying, selling, and even end up selling your shit against your will. I guess it’s not really yours if someone else can sell it. . .
Do you really own anything if someone else can sell it?
If you have a car, but someone else can sell your car for market price, do you own it?
Yea, so,
You never owned your shares
In Closing,
There’s a reason why the Direct Registration of Shares movement is taking charge.
Because people don’t like being simply ‘beneficial owners’. It’s some Prima Nocta Financial Cuckery and anyone who gives a damn about ownership and finances would not sit well with some broker mishandling their money.
Why would you?
This is all a part of the scam that makes up the US Capital Markets. This part of the scam is facilitated by brokers and robber barons fleecing off retail traders under the illusion of a free market. The key thing to remember is that;
Brokers aren’t your friends.
I’m not saying you can’t use a broker. Just know what you’re getting in to. It’s all a scam, so play the scam how you want to play it or don’t play at all. After all, there are No Safe Bets.
*Not Valid Financial, Legal, Life, or Any Advice.