Ustocktrade Review 2022 – Peer-to-Peer Stock Trading

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UstocktradeBased in Newton, Mass., Ustocktrade is an alternative trading system (ATS) operating under the motto “Wall Street to Main Street.” The platform offers peer-to-peer stock trading without the use of an outside broker to facilitate the trade. Instead, Ustocktrade matches buy and sell orders within its own network. By eliminating the use of brokers, Ustocktrade can keep member fees to a low monthly charge of just $1, with $1 trades. In addition, they can also provide faster settlement, enabling investors to get the most favorable price on a security.
Commissions & Fees - 9.5
Customer Service - 8
Ease of Use - 7
Tools & Resources - 7.5
Investment Options - 5
Account Options - 5

6

Ustocktrade's simple investment platform with low fees and no account minimums should appeal to new investors. However, more sophisticated investors won't be impressed with the relatively limited functions and $10,000-per-trade limit.

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The company is a startup, having begun operations in 2015, but the stock trading platform was launched at the beginning of 2016 by Tony Weeresinghe, the former head of global development for the London Stock Exchange Group. Weeresinghe is self-funding Ustocktrade.

The Ustock name is derived from “You Stock Trade.” The startup’s trades are limited to stocks listed on U.S. exchanges, and the site is aimed at college students and other novice investors. Users must link their Ustocktrade accounts to their bank accounts.

The company was actually created to provide financial support for The Cainan Foundation, which is a 501(c)(3) tax-exempt organization. The foundation is dedicated to educating some of the world’s most disadvantaged kids. It operates by building self-sustaining boarding schools and provides a first-rate education to vulnerable and disadvantaged children throughout the world.

Ustocktrade Features

Minimum Investment$0
Stock/ETF Trades$1
Options TradesN/A
Mutual FundsN/A
Investment TypesStocks, OTC/Penny Stocks, ETFs, Mutual Funds, Bonds, Options, Forex, Cryptocurrencies, Futures
Accounts Types
  • Taxable
  • Joint
  • Traditional IRA
  • Roth IRA
  • Rollover IRA
  • SEP IRA
  • SIMPLE IRA
  • 401(k)
  • Solo 401(k)
  • Trusts
  • Limited Partnerships
  • Partnerships
  • Coverdell
  • 529
  • Custodial
  • Non-Profit
  • Annuities
  • Checking
  • Savings
  • Money Market
  • CDs
Broker Assisted TradeN/A
Virtual Trades

Customer ServiceEmail

How Does Ustocktrade Work?

For more information check out their video.

Same Day Trade Settlement — Ustocktrade operates through what it refers to as “T+0.” Securities trades handled by traditional brokers will take up to three days to settle into your account; this is referred to as “T+3.” This can make it difficult if you want to buy and sell multiple stocks on the same day, since your sales proceeds will not be available for three days.

Since Ustocktrade matches trades internally within the network, they can provide same-day settlement at no additional cost — that is T+0. That means any security sales you complete will provide immediate availability of funds to buy new investment positions.

Exchange-Traded Notes (ETNs) — These are funds, similar to exchange-traded funds (ETFs), in which you purchase shares in debt instruments issued by financial institutions, where performance is linked to the credit rating of that institution as well as a specific index.

Trading Simulator — Ustocktrade enables you to practice trading with zero risks. Paper trading is free to use, and it provides you with virtual cash to practice investing using real-time market data. This will help you prepare for real-world investing activity without risking any of your own money.

  • Available investments — Ustocktrade currently permits you to invest in most equity securities listed on U.S. stock exchanges. They also allow you to invest in 92 ETFs, as well as eight ETNs.
  • Account protection — Your Ustocktrade account provides SIPC coverage, which insures your account for up to $500,000, including $250,000 in cash.
  • Clearing Agency — Ustocktrade uses Electronic Transaction Clearing Inc. as its clearing agent.
  • Maximum Deposit — There is no minimum required. There is, however, a maximum trading limit of $10,000 on any order you buy or sell. The purpose of this is to limit the use of the platform to retail investors, rather than by large, professional investors or by high-frequency traders. As noted above, Ustocktrade is aimed at college students and novice investors.

Pricing

Ustocktrade fees are as follows:

  • Membership Fee: $1 per month
  • Trading Fees: $1 per trade to buy or sell (plus all applicable regulatory fees)
  • Bank fund transfers (ACH): No fee in or out
  • Customer Account Transfer In from another broker (ACAT and Non-ACAT): No fee, though this option is not yet implemented
  • Account Transfer Out (ACAT and Non-ACAT) to another broker: $40
  • Returned Bank Fund Transfer (ACH Items): $20

Ustocktrade ‘Superusers'

Ustocktrade is a platform that involves primarily small investors. However, as a network trading platform, it does welcome larger investors who can function as market makers within the network. These market makers are referred to as Superusers.

Superusers help to satisfy the minimum capital requirements for the platform and provide liquidity in securities traded through the trading system. They are expected to fill marketable customer orders if those orders cannot be matched with other investors within the network.

However, the possibility exists that Superusers may be unable or unwilling to take the counter side of an investment transaction. This means they are not guarantors of liquidity in any sense of the term. This can mean that investor orders are either not executed or not executed on a timely basis.

As Ustocktrade is still essentially a startup, the platform has just one Superuser — the Ustocktrade chief executive officer. That does present the possibility of interruptions in trading activity. As the platform grows, the expectation is that more investors who qualify as Superusers will participate in the service.

Ustocktrade Pros & Cons

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Summary

Ustocktrade is an interesting concept, creating a truly community-based investment platform. It may be ideal for new and small investors, as well as early adopters since the fees are very low and there are no account minimums. However, the service will probably be of very limited use to larger, more sophisticated investors.

Ustocktrade is a unique trading platform that may have an outstanding future. It gets high marks for same-day trade settlements, as well as extremely low fees. But as a startup operation, there are currently a lot of limitations and open questions.

Kevin Mercadante

Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry. He lives in Atlanta with his wife and two teenage kids.

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9 Comments

  1. Don’t use them. Their customer service is terrible and their policies are preventing me from doing something very simple: add a bank account. The way my credit union account number and ACH number system is different than their policy and even though I verified everything they needed they still will not add my bank. Terrible service. I bet they don’t allow transfers, so I’m going to have to realize each stock and repurchase from a broker more in modern times.

  2. Hey! thank you for this review. In doing some research I noticed people said UST has switched from T0 to T3. This was back in 2016 and this year their twitter has discreetly mentioned changes
    As you recently updated the review, did they switch back to T0?

    1. They switched back to T+0. Instant settlement and no PDT rule so unlimited trades. I’m in and out of stocks all day long. I know this is late but thought it might still help someone.

  3. Thank you for the review. Can I do many day trades or they have day trading limitations? (I.e day trading pattern and 25k minimum )

    1. The pattern day trade rule is a federal regulation. It applies regardless of which firm you use.

    2. Absolutely no PDT rule applies. You can trade as much as you want to as long as you have funds in your account. And there is no t+3 rule anymore so funds settle instantly. I am just waiting to find out what the execution times and liquidity are like. I start trading on it next week.

    3. As long your maximum order not to exceed 10k, you are ok to do as many trades on a day, Its a bit complicated to do the technical analysis, I use charles swab charting and Im increasing little by litle my 3k account in 1 year trading part time im at 8k by now Feb.2019

    4. Dont use them. You will get locked into trades and lose out on movement intra day. I am leaving this company because of this issue.

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