Thursday, September 19, 2013

Q&A: Choosing between COL or BPI Trade online broker

Hazel says

Good day! Your blog was very informative regarding your stock recommendations. I'm a newbie when it comes to the stock market. I'm planning to invest in stocks but still don' t know if i'll choose col or bpi trade.


Hi Hazel, thank you for visiting. For your first question, you can also consider First Metro (under Metrobank). This is my broker and so far I have no complains about it. If you're really choosing between BPI Trade and COL, I would suggest to choose COL in general. I have officemates who use COL and BPI Trade, and BPI Trade tends to have a lot of down time since it's a very old system, and many times you might get frustrated like my officemate.

But I'll tell you two reasons why you would consider BPI Trade, and these are deciding factors for some, especially those who have a lot of money:

1. The cash you don't use in stocks earns interest (same as a normal savings deposit). This is a great convenience, but it's only useful if you have a lot of money, like at least 5M, and you actively trade your stocks. For example, there are times that you sell all or a big chunk of your portfolio, probably because you feel that the stock is already overvalued or there's a crisis. During this time, the money is just parked in your account. Parked money in First Metro and COL accounts, AFAIK, do not earn interest, but BPI Trade does. So if you have 5M parked in your account, you'll probably earn around 4,000+ Pesos per quarter (rough estimate). Not bad.. can be used to buy groceries.

2. Odd Lot Trades do not impose the minimum P20 commission rate. There are fees when you trade stocks, it's usually 0.25% or P20 whichever is higher. If you're not familiar with odd lots, it's simply the trades below the minimum unit of trading. For some who's into odd lot trading, this is a great advantage, but for usual people, this is not that useful.

The above two are the advantages of BPI trade over the others, but I'm guessing you won't be needing them that's why I would suggest COL or First Metro in your case.



For your financial questions, feel free to email me at manny@pesobility.com and I will try to answer them as soon as I can.

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