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Fidelity Review – Unbiased Pros & Cons Revealed✔️


 

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WHO IS FIDELITY?      

According to research in South Africa FIDELITY is a US stockbroker that was founded in 1946. It is regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Information about the company is quite limited on their website, as is the amount of financial information. The company seems to be owned by a parent company called FMR LLC.

FIDELITY offers good quality research and a lot of tools, including trading ideas, detailed fundamental data, and a good charting. Its web trading platform is easy-to-use with advanced order types.

Customers can trade with US and international stocks. Account opening is not fully digital and the fees for some mutual funds and financing rates are high.

 

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SAFE OR SCAM

One of the best benchmarks to measure the safety of a broker like FIDELITY, is to establish which regulating authorities are watchdogs over its actions.

FIDELITY is regulated by the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA).

In the US, customers are served by FIDELITY Brokerage Services LLC which belongs to the US investor protection scheme SIPC. The SIPC scheme protects customers against the loss of cash and securities if a broker goes bust. The SIPC protection is limited to $500 000, which includes a $250 000 limit for cash.

SIPC covers notes, stocks, bonds, mutual funds and investment company shares, and registered securities. It does not cover instruments such as unregistered investment contracts, unregistered limited partnerships, fixed annuity contracts, currency, and interests in gold, silver, or other commodity futures contracts or commodity options.

FIDELITY itself provides an additional total of $1 billion coverage with no limit on securities coverage, but a $1.9 million limit on cash per account.

FIDELITY does however not provide negative balance protection.

 

PRO AND CONS

PROS CONS
1.      Solid research tools 1.      Not fully digital account opening
2.      Great web trading platform 2.      High mutual fund fees
3.      US and international stocks 3.      Financing rates are high
4.      Excellent trade executions 4.      Non US citizens or residents cannot open an account

 

LEVERAGE

Leverage is a facility that enables you to get a much larger exposure to the market you are trading than the amount you deposited to open the trade. Leveraged products, such as forex trading, magnify your potential profit – but also increase your potential loss.

Leverage amount is expressed as a ratio, for instance 50:1, 100:1, or 500:1. Assuming that you have $1,000 in your trading account and you trade ticket sizes of 500,000 USD/JPY, your leverage will equate 500:1.

Margin is the amount of collateral to cover any credit risks that may arise during your trading operations. It is expressed as the percentage of position size (e.g. 5% or 1%), and you have to have funds in your trading account to ensure sufficient margin.

For example, on a 1% margin a position of $1,000,000 will require a deposit of $10,000. The margin level in a trading account needs to be equal or more than 100% to be able to open new trades, otherwise your trading account will be fully hedged.

FIDELITY doesn’t give any indication of leverage ratios on its website.

 

ACCOUNTS   

A forex account at FIDELITY is a trading account that you will hold and that will work similarly to your bank account, but with the difference that it is primarily issued with the purpose of trading on currencies.

Forex Islamic accounts are also known as swap-free accounts as they imply no swap or rollover interest on overnight positions, which is against Islamic faith.

Often, the number and type of accounts that a trader can open with a broker company differs depending on the country in which it operates and the regulation authorities under whose jurisdiction it falls.

FIDELITY is a US stockbroker that targets US clients and offers Individual and Joint Accounts, as well as Managed Accounts.

FIDELITY accounts are also available in some other countries through the FIDELITY group’s other subsidiaries. FIDELITY Investments Canada serves only Canadian customers, while FIDELITY International has a strong presence in Western and South-East Asia. The available product range and services differ from country to country.

 

MARKET INSTRUMENTS

The most popular market instruments available from most brokers for trading include:

Forex

Forex trading describes the currency exchange market which refers to the global, decentralised marketplace where individuals, companies and financial institutions exchange currencies for one another at floating rates.

Commodities

Commodity markets offer many investment opportunities for traders. Soft commodities have been traded for centuries and plays a major role in portfolio diversification and risk management. Investing in contract-based tradable goods is a reliable way to mitigate risk during times of economic uncertainty.

Indices

Equity, or stock indices, are actual stock market indexes which measure the value of a specific section of a stock market. They can represent a specific stock market or a specific set of the largest companies of a nation.

Precious metals

The trading of gold and other precious metals, along with crude oil, copper or petroleum, are hard commodities that play a major role in the commodities market and are contract-based tradable goods.

Energy

The typical feature of energy prices is high volatility due to the influence of political and environmental factors, supply and demand, extreme weather conditions and global economic growth.

FIDELITY offers a lot of asset classes, from stocks to options but no Forex and futures. Stocks at the NYSE, NASDAQ, AMEX, OTC exchanges can be traded.

FIDELITY has a good mutual fund coverage and a wide bond offer. The following options exchanges are available: CBOE, AMEX, PHLX, ISE, ISE Gemini, BOX, NASDAQ, NASDAQ OMX BX, NYSE BATS, NYSE ARCA, MIAX, and C2.

 

FEES

Cost depends on different factors, like spread and margins, and FIDELITY clients may also experience different fee structures according to their country or place of residence.

The spread of a currency pair is the difference between the bid and the ask rate. A pip represents the smallest increment that an exchange rate can move.

Margin is the amount of money required in your account in order to open a position. Margin is calculated based on the current price of the base currency against USD, the size (volume) of the position and the leverage applied to your trading account.

FIDELITY charges low trading fees and non-trading fees. There are no commissions for stock trading but fees for some mutual funds and financing rates can be high.

FIDELITY charges no stock and ETF commissions for American clients.

FIDELITY has generally low bond fees and no commission for Treasury bonds. For other bonds, like corporate bonds, the commission is $1 per bond and there is a maximum of $250. It charges no inactivity and account fees, nor withdrawal fee if you use ACH transfer. Withdrawals to other banks using wire transfer cost $10.

 

DEPOSIT AND WITHDRAWAL

Accounts usually requires a certain minimum initial deposit, which can be paid in several ways. Withdrawals can usually be done with the same ways, but sometimes differ.

In the case of FIDELITY, you can choose from 16 base currencies: USD, AUD, MXN, ZAR, EUR, DEN, NZD, SGD, GBP, HKD, NOK, SEK, CAD, JPY, PLN, and CHF.

FIDELITY charges no deposit fees and customers can use check, ACH, wire transfers, and PayPal for deposits. Credit/debit card services are not provided. FIDELITY offers the BillPay feature as an additional service.

You can only deposit money from accounts that are in your name.

FIDELITY charges no withdrawal fees when using ACH withdrawal, but domestic and international wire transfers cost $10. An ACH bank transfer withdrawal can be completed within 2 business days.

 

TRADING PLATFORMS

The forex trading platform provided by FIDELITY to its clients is in essence the software to carry out their trades. Some brokers provide only one, others quite a few platforms.

A multi-asset trading platform is one that allows clients to trade forex as well as other asset classes. The decision about which platform to choose will usually depend on what a client would like to trade.

FIDELITY provides an in-house developed web trading platform called Active Trader Pro. The desktop version of the trading platform is mainly suitable for active and advanced investors and a mobile version is also available. All are available only in English.

 

HOW TO OPEN AN ACCOUNT

Similarly to a bank, to register a forex trading account with FIDELITY for the first time, you will be required to go through a basic “know your customer” process, which will allow FIDELITY to ascertain that your submitted details and ensure the safety of your funds and account details.

With FIDELITY the process is easy and fast, but not fully digital. The application has to be mailed with the relevant ID’s photocopies.

 

CUSTOMER SUPPORT

Potential traders need to make sure the broker company they chose will offer sufficient support whenever they need it.

In the case of FIDELITY, the support team is available 24/7 and customers can reach them via live chat or telephone although it is available only in English.

 

EDUCATION       

Before starting to trade, potential clients of FIDELITY should avail themselves of all possible information and trading skills needed to be successful in the world of forex and commodity trading.

FIDELITY offers a demo account, platform tutorial videos, general educational videos, webinars and educational articles. A FAQs section primarily focuses on trading-related information.

The online webinars’ topics are suitable for beginners or advanced traders.

 

RESEARCH         

To be able to trade with confidence, traders should do as much as possible research about this kind of speculative trading before commencing, but also preceding every daring deal to ensure that they don’t lose money unnecessarily and trade as profitable as possible.

With FIDELITY they have access to many useful tools which are great for fundamental analysis and strategy building. FIDELITY also provides trading ideas for stocks, ETFs and mutual funds and ETFs and mutual funds are well supported by third-party providers like MorningStar.

FIDELITY provides wide fundamental data for different assets, from stocks to funds and good charting tools. Their news feed is provided by third parties, like Wall Street Journal or Bloomberg.

 

AWARDS

Being an awarded company instils extra confidence by traders.  FIDELITY can show some awards accumulated during its years in business, including the following:

Best Online Broker 2020 – Barron’s.

Best Online Broker 2020 – Investor’s Business Daily

Top-Rated Online Broker 2020 – StockBrokers.com

 

CONCLUSION  

FIDELITY has a long track record as broker and has successfully survived previous financial crises. It is regulated by top-tier regulators and is regarded as one of the biggest US stockbrokers.

FIDELITY’s research is outstanding and covers many tools, the web trading platform is easy to use and offers advanced order types. Its products include the US market as well as international stock exchanges.

Some drawbacks about FIDELITY are the not fully digital process of account opening, high fees for mutual funds and a high financing rate.

 

DISCLAIMER

FIDELITY warns potential customers that Forex and CFDs trading always carries a high risk and may not be suitable for all investors.

Before deciding to trade with FIDELITY, potential traders are advised to carefully consider their investment objectives, financial situation, needs and level of experience before investing money they cannot afford to lose.

FIDELITY warns that margin trading involves the potential for profit as well as the risk of loss and that movements in the price of foreign exchange and commodities are very unpredictable, hence FIDELITY cannot guarantee a maximum loss that a trader may suffer, according to research in South Africa.

 

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FIDELITY AT A GLANCE

Broker’s Name FIDELITY
Headquartered Boston, Massachusetts
Year Founded 1946
Regulating Authorities SEC, FINRA
Countries not accepted for trade Not indicated
Demo Account Yes
Islamic Account (Swap Free) No
Institutional Accounts Yes
Managed Accounts Yes
Maximum Leverage Not indicated on website
Minimum Deposit Not indicated on website
Deposit Options ACH, wire transfers, PayPal and BillPay
Withdrawal Options ACH, wire transfers, PayPal and BillPay
Platform Types Active Trader Pro
OS Compatibility Desktop, web and mobile
Tradable Assets Stocks, options, mutual funds, bonds
Languages supported on Website English
Customer Support Languages English
Customer Service Hours 24/7

 

 

Frequently Asked Questions

 

 

How many instruments can I trade with Fidelity?

 

You can trade several different instruments with Fidelity, which include the following:

  • Stocks,
  • Options
  • Mutual funds
  • Bonds

 

Which platforms are supported by Fidelity?

 

Fidelity supports the Active Trader Pro platforms

 

Is Fidelity regulated?

 

Yes, Fidelity is regulated by SEC and FINRA.

 

Is Fidelity a recommended forex trading broker for experts and beginners?

 

Fidelity offers a fair trading environment for all types of traders.

 

What is the overall rating out of 10 for Fidelity?

 

Overall rating for Fidelity is 6/10





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