Commission-free trading appears to be the trend that isn’t going away, and Tiger Brokers (Singapore) is the latest company to join the race to the bottom. To stay competitive, the Xiaomi-backed online trading platform is ‘permanently’ slashing its brokerage fees on US stocks to zero.
Tiger Brokers said in a corporate statement that it’s rolling out an “inaugural lifetime zero commissions campaign for unlimited trades” on US stocks. Citing its own data, the brokerage reveals that the average daily trading value of US Securities amounted to $102 million per day on its platform.
Since launch in February 2020, the platform has hit several milestones, having onboarded the SGX and then the Australian Securities Exchange last year. With an annual growth rate of 250% and trading volumes of more than $404.3 billion as of December 2021, the online trading platform currently has over 1.8 million customers.
Tiger Brokers, which is backed by Interactive Brokers, Chinese tech giant Xiaomi and renowned investor Jim Rogers, also noticed that 87% of its customer base are active traders of US stocks. Overall, its Q4 volumes registered the third consecutive quarter of over 100% year-over-year growth in funded accounts in Singapore.
The zero-fee craze continues
By offering free trades on its platforms, the NASDAQ-listed firm says its clients can better capitalise on small price movements in the market and unlock cost savings with more efficient trading.
Eng Thiam Choon, CEO of Tiger Brokers (Singapore) said: “Approximately 87% of our account holders currently trade US securities, and we have been seeing increased investor interest in US markets amid increased volatility globally. Through this campaign, we hope to lower the barriers to investing and make it easier and more efficient for Singapore investors to access global markets through our platform.”
In addition to the SGX, Tiger Brokers offers investors access to five other global exchanges: The New York Stock Exchange, NASDAQ, the Hong Kong Exchange, the Shanghai/Shenzhen-Hong Kong Stock Connect and the Australian Securities Exchange.
Although whether the brokers’ offering was actually free is less straight forward than it sounds, but most retail apps and platforms have caught up with a wave of fee-eliminating announcements over the past two years. However, the stock-trading business model of those financial giants resembles Robinhood’s model, which makes money from interest on customer accounts, securities lending, and a small amount from payment for order flow.