Ben’s Guide to Bux Zero in Ireland
Advertorial sort of.
What is Bux Zero?
Bux Zero is an app that allows you to buy shares and ETFs. It’s a heavily backed newcomer to the market, trying to disrupt existing brokers who usually high fees for stock trading and for just having an open account. Traditional brokers are probably going to die as their fees are so high. New platforms such as etoro, Trading212 and Degiro as well as Bux Zero are going to take over.
Why Choose Bux Zero?
As the name suggests, Bux Zero charges zero fees on most orders. A traditional broker would charge a fee to execute an order as well as account fees, dormancy fees, custody fees, etc. These all add up.
- No fees on USA shares.
- No fees on Zero Order EU shares
- No fees on Zero Order ETFs
- No deposit or withdrawal fees
- No Custody Fees
- No fee for real time quotes
Bux Zero charge €1.50 for market orders on EU shares and ETFs
Bux Zero charge €1.50 for limit orders on EU shares and ETFs
More on the difference later.
Payment For Order Flow (PFOF)
PFOF is a system where brokers get paid for sending your trades to selected parties for execution. Some European brokers use PFOF to keep their commissions and fees lower. Others use it to generate more profit.
For investors, PFOF has one significant drawback – in most cases, it lowers the quality of execution. That means, generally speaking, when you buy or sell shares, you’re likely to get worse execution prices for your trades.
The European Securities & Markets Authority (ESMA) has warned about PFOF in the past, and is currently reviewing the practice. The Dutch regulator AFM has published a study in which they concluded that for trades with a value of €3000, the average price deterioration for PFOF exchanges is between €1.44 and €3.46. A recent Spanish study showed that only 3.3% of trades using PFOF achieved the best execution possible.
At BUX, they don’t use PFOF because they want to offer the best execution quality. To continue providing the best service, they increased some of their fees from €1 to €1.50 and the FX markup from 0.25% to 0.35%.
How does Bux Zero make money?
If they don’t charge fees, then how do they make money? Its a good question with a simple answer. They make €1.5 on market and limit orders for EU shares. This will all add up.
Also, they make some money on the exchange fees when buying USA shares. You have to buy USA in dollars whereas your account in Euros. You will get changed a small 0.35% forex mark up. This might not sound a lot and compared to some fees a traditional bank would charge, its not but it all adds up.
Types of Order
Market Order – This is an order, buy or sell, that is placed immediately and the current price is accepted. This is used when you are sure you want a share, and the execution is more important than the price. For example, if I wanted to buy an Apple share, the market price is, say, $160, I would just pay that.
Limit Order -This is an order with a price attached to it. For example, I want to buy Apple shares but only at $150, my order would sit there until the price dropped to $150 and then I would buy. If I wanted to sell, I could put a limit order in for, say, $170 and it would sell once Apple hit $170.
Zero Order- These are orders that are free with Bux Zero. They can be placed during trading hours but will not be settled until the end of the day. The price you pay will depend on the price at the end of the day rather than at the time you put the order in.
What shares can I buy on Bux Zero
You can buy a range of EU and USA shares and ETFs on Bux Zero. The stock markets they cover are Austrian, Belgium, German, Spanish, French, Dutch and USA. If your stock/ ETF of choice is listen on any other those markets, you will be able to buy on Bux Zero.
The main commission for Irish people is the Irish stock market and also the London Stock Exchange. If you want to buy some big household names like Bank of Ireland or Tescos, you will have to look elsewhere.
Bux Zero Fractional Shares
With the stock market at all time highs in the USA, some shares are very expensive in nominal terms and it is hard for the small investor to buy a single share in say, Amazon. At the time of writing, shares in Amazon are around $3000. That’s a lot for most investors. Bux Zero allows you to buy fractional shares in companies from as little as €10.
Berkshire Hathaway is Warren Buffet’s public company that owns his portfolio. It has 2 share classes A and B. A shares never split and over the years, have become very expensive in nominal terms. At the time of writing, one Berkshire A share is worth nearly half a million dollars.
To allow regular people to invest, Berkshire have B shares. These trade at a fraction of the A shares but at the time of writing are still priced at $325 each. Its a lot less but still out of the reach of many investors.
Enter fractional shares. With fractional shares, you can buy a proportion of a company for as little as €10. For €10, you can buy approximately 3% of a Berkshire B share. It’s not much but if you want a piece of Warren Buffets portfolio.
Bux Zero Fractional Shares list
This list is correct as of March 1st 2022. New shares are added all the time.
|Abbott Laboratories||Boeing Company||Fidelity National Information Services||Netflix||Snowflake|
|Activision Blizzard||Bristol-Myers Squibb Company||Fiserv Inc||NIO||Spotify|
|Alibaba ADR||Chipotle||General Motors Company||PayPal||Taiwan Semiconductor|
|Alphabet A||Cisco Systems Inc||Gilead Sciences Inc||Peloton Interactive Inc||Tesla|
|Alphabet C||Citigroup Inc||Global Payments Inc||Penn National Gaming||Twilio|
|American Express||Coinbase||Intellia Therapeutics||United Airlines|
|Apple||Conocophillips||Johnson & Johnson||Plug Power||Verizon Communications Inc|
|Asana||Daqo New Energy||Marvell Technology Inc||Proctor & Gamble||Visa Inc|
|Avis||Dell Technologies Inc||McDonald’s||Qualcomm||Vmware Inc|
|Baidu||Domino’s Pizza||Merck & Company||Roblox||Walmart|
|Berkshire Hathaway B||Ebay Inc||Meta Platforms||Roku||Walt Disney|
|Beyond Meat||Electronic Arts||Micron||Royal Caribbean Cruises||Well Fargo & Company|
|Blackrock||Exxon Mobil||Moderna||Shopify||Zillow Group CI C|
Is my money safe?
Cash is not stored at BUX Zero, it’s stored at their partner ABN AMRO Clearing Bank, a major Dutch bank. Since they are a bank, money is guaranteed by the DNB (De Nederlandsche bank, the Dutch national bank). This is basically the same rule that is active everywhere in Europe that protects your money up to €100k.
Shares are stored in a different spot. This is BUX Custodian. Which is completely separated from BUX in legal terms. But still, there is the protection of 20k there too via the DNB if the worst scenario plays out.
From the Organization and compliance manual:
What is the Signup Bonus?
A free share with a value of €1 to €200 selected at random (but higher chances on lower values) handed out after the first deposit.
I personally got a share in PG & E.
Sign up here
What is the minimum deposit?
Let me know if you have any questions about investing with Bux Zero. I cannot give advice on stock purchases but can answer any questions about opening accounts and how it all works from Ireland.