Author Topic: Using a credit card to purchase stocks at Loyal3  (Read 198789 times)

wtjbatman

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Using a credit card to purchase stocks at Loyal3
« on: January 18, 2014, 02:02:58 AM »
Anyone have experience with Loyal3? I've seen it mentioned in a few places now, and just realized there are two things I love about it and one thing I dislike. Love #1: Use credit card to buy stocks. Love #2: It's free to buy/sell stocks. No commission baby. Dislike: Very limited number of stocks.

It clearly has one huge limitation, and that's the fact they only offer 50 or so stocks. However I'm liking the idea of finally being able to use a credit card to buy stocks. Hello credit card rewards. Oh and you can invest in fractional shares, so I can finally get my hands on some Apple stock without saving up $600 for one share.

I just used my rewards credit card to invest $10 in Apple for schnitzen giggles. I think this site might be a boon for dividend investors, considering some of the high quality dividend paying stocks available.

dragoncar

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #1 on: January 18, 2014, 01:50:39 PM »
Interesting... I wonder:

1) if this counts as a cash advance to the CC
2) how closely you can approximate the s&p500 using these stocks... There are certainly some shot players

sheepstache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #2 on: January 18, 2014, 02:28:32 PM »
I bought some stuff through loyal3 this week and it's showing up as just a regular charge on my credit card.

Also don't forget the limitation that it's like a DRIP and buys and sells in batches.  So there's no control over price and it takes a long time.  It takes 7 business days total for the sale to be settled. (http://loyal3.force.com/support/articles/FAQ/How-does-the-stock-purchase-process-work-using-LOYAL3/)
But if it's something you want anyway, that probably doesn't matter.  And no commission plus an instant 1% return on my investment definitely seems like a good deal to me.

dragoncar

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #3 on: January 18, 2014, 03:04:26 PM »
I bought some stuff through loyal3 this week and it's showing up as just a regular charge on my credit card.

Also don't forget the limitation that it's like a DRIP and buys and sells in batches.  So there's no control over price and it takes a long time.  It takes 7 business days total for the sale to be settled. (http://loyal3.force.com/support/articles/FAQ/How-does-the-stock-purchase-process-work-using-LOYAL3/)
But if it's something you want anyway, that probably doesn't matter.  And no commission plus an instant 1% return on my investment definitely seems like a good deal to me.

Is the limt 50/mo total or $50/mo per stock?

sheepstache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #4 on: January 18, 2014, 03:08:23 PM »
The limit is $2500 per stock per month (30 day period, not calendar).
The minimum for each purchase transaction is $10 per stock.

dragoncar

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #5 on: January 18, 2014, 04:46:05 PM »
The limit is $2500 per stock per month (30 day period, not calendar).
The minimum for each purchase transaction is $10 per stock.

But you can't buy $2500 of a single stock with a CC

Left

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #6 on: January 18, 2014, 05:03:47 PM »
hm... I wouldn't mind it if I could use it to hit credit card rewards.... I'd plan to invest regardless so if I put money to CC company instead of broker, all's the same. Not that I like the choices, but a few I could see being fairly stable = I buy them, sell them, transfer money back to me and take CC reward points.

I'll keep my eye on this, since it's fairly new (to me if not everyone) I want to see how the company handles things
« Last Edit: January 18, 2014, 05:07:16 PM by eyem »

sheepstache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #7 on: January 18, 2014, 05:12:16 PM »
The limit is $2500 per stock per month (30 day period, not calendar).
The minimum for each purchase transaction is $10 per stock.

But you can't buy $2500 of a single stock with a CC

Oh, that's you were asking.  But, no, I think you can.  Where are you seeing a $50 limit?  Both of my purchases were over $50.

You might not be able to use a cc when participating in an IPO.

HOLD THE PHONE:
Okay, here's where it says the limit is 50.
https://loyal3.secure.force.com/support/articles/FAQ/What-forms-of-payment-are-accepted-for-stock-purchases/
But I haven't heard anyone else mention this and my orders were one-time purchases for 100 and 120.  Maybe it's okay because they're multiples of the acceptable amounts??  I would think it would reject you right there on the form submission for putting the wrong funding source or an unacceptable amount in, but maybe I'll get rejected within the 7 days as they process it.

wtjbatman

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #8 on: January 18, 2014, 06:29:06 PM »
The limit is $2500 per stock per month (30 day period, not calendar).
The minimum for each purchase transaction is $10 per stock.

But you can't buy $2500 of a single stock with a CC

Oh, that's you were asking.  But, no, I think you can.  Where are you seeing a $50 limit?  Both of my purchases were over $50.

You might not be able to use a cc when participating in an IPO.

HOLD THE PHONE:
Okay, here's where it says the limit is 50.
https://loyal3.secure.force.com/support/articles/FAQ/What-forms-of-payment-are-accepted-for-stock-purchases/
But I haven't heard anyone else mention this and my orders were one-time purchases for 100 and 120.  Maybe it's okay because they're multiples of the acceptable amounts??  I would think it would reject you right there on the form submission for putting the wrong funding source or an unacceptable amount in, but maybe I'll get rejected within the 7 days as they process it.

Well unless my reading comprehension skills are failing me (it's possible), that answer in the FAQ is just plain wrong. It says "Credit and debit cards may not be used for one-time purchases, or for scheduled monthly investments other than the three (3) pre-set monthly investment amounts.", when in fact I just used my credit card to purchase $10 in Apple and $10 in Microsoft as one-time purchases. I made sure of it in fact.

KingCoin

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #9 on: January 18, 2014, 09:02:01 PM »
Perhaps they're waving the credit card maximum during their build-out. Clearly there has to be some limitation, otherwise I could just churn like crazy and earn an infinite number of credit card rewards (all of which comes out of Loyal3's bottom line).

What's the business model here? Stuffing amateur investors with sketchy IPOs and allowing people to buy stocks like Apple as a loss leader?


wtjbatman

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #10 on: January 18, 2014, 11:42:14 PM »
Perhaps they're waving the credit card maximum during their build-out. Clearly there has to be some limitation, otherwise I could just churn like crazy and earn an infinite number of credit card rewards (all of which comes out of Loyal3's bottom line).

What's the business model here? Stuffing amateur investors with sketchy IPOs and allowing people to buy stocks like Apple as a loss leader?

According to this article, the companies featured on Loyal3 "pick up the cost of investing". Loyal3's bottom line may not be taking a hit after all. Not to mention they can draw plenty of customers just by being the only guys on the block who take credit cards.

I look at Loyal3 as an example of a new type of investment company and business model. Forget Fidelity and Ameritrade, think Loyal3, Robinhood, and Motif Investing.

sheepstache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #11 on: January 19, 2014, 06:47:13 AM »
What's the business model here? Stuffing amateur investors with sketchy IPOs and allowing people to buy stocks like Apple as a loss leader?
That's my assumption. Though, as batman says, ostensibly part of the cash is coming from the companies.  I'm wondering if it's a different model for DRIPs.  Coke used to do DRIP in-house.  Now they're with Computershare and it's more expensive for the investor.  Possibly Loyal3 is less expensive for Coke than doing it in-house was.

Eating the cost of unlimited credit card use to get people exuberant about it makes sense, though they've been live for two years now I think.

KingCoin

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #12 on: January 19, 2014, 08:14:26 AM »
Perhaps they're waving the credit card maximum during their build-out. Clearly there has to be some limitation, otherwise I could just churn like crazy and earn an infinite number of credit card rewards (all of which comes out of Loyal3's bottom line).

What's the business model here? Stuffing amateur investors with sketchy IPOs and allowing people to buy stocks like Apple as a loss leader?

According to this article, the companies featured on Loyal3 "pick up the cost of investing". Loyal3's bottom line may not be taking a hit after all. Not to mention they can draw plenty of customers just by being the only guys on the block who take credit cards.

I look at Loyal3 as an example of a new type of investment company and business model. Forget Fidelity and Ameritrade, think Loyal3, Robinhood, and Motif Investing.

Whenever dealing with a financial service provider, I think it's absolutely critical to understand how they're making money (and how much).

I'd actually be very surprised if Apple or Amazon was picking up trading costs (why wouldn't they pick up trading costs at all brokers?).
The article referenced seems pretty vague and cheerleady, without actually explaining how these guys make money or directly stating that Apple pays them. Given the focus on "Social IPOs" on the landing page, I'm guessing they're making their money on IPO syndication fees.

Actually, just found this here http://bobbyfinance.com/2013/11/25/loyal3-review-stock-investing/#
"LOYAL3 makes money by charging fees to companies that they partner with and through its role in IPOs."

I guess if you steer clear of the IPOs and can build a diversified portfolio it might not be horrible. If you're limited to $50/mo in credit card purchases, you're only looking at about $12/yr in rewards. If you're a passive investor, you might as well just invest in a diversified portfolio for free with Vanguard. If you're an active investor, you'll want full flexibility in your trading platform. I don't really see what niche this fills.
« Last Edit: January 19, 2014, 08:56:49 PM by KingCoin »

wtjbatman

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #13 on: January 19, 2014, 06:31:26 PM »
I guess if you steer clear of the IPOs and can build a diversified portfolio it might not be horrible. If you're limited to $50/mo in credit card purchases, you're only looking at about $12/yr in rewards. If you're a passive investor, you might as well just invest in a diversified portfolio for free with Vanguard. If you're an active investor, you'll want full flexibility in your trading platform. I don't really see what niche this fills.

If there is a credit card limit (especially as low as $50 a month) it definitely hurts the service's value. I like the blue chip stock offerings, there are some real nice dividend stocks available. The IPO service is interesting, but not something I will likely take advantage of.

I'm going to experiment with Loyal3 over the next month with my rewards credit card and see how things go.

sheepstache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #14 on: January 21, 2014, 02:21:53 PM »
Update:

The $100 and $120 one-time orders that I placed with my credit card were executed.

dragoncar

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #15 on: January 21, 2014, 03:04:44 PM »
Update:

The $100 and $120 one-time orders that I placed with my credit card were executed.

Good to know.  Sounds like a loophole for now, which I suspect they will someday close.

massmustache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #16 on: January 23, 2014, 02:12:32 PM »
There's a lot of CC that offer deals like "Spend X in first 90 days and get XX,XXX points"... those points USUALLY equate to a ~20% discount (using points to pay bill or get cash).

See the Chase Sapphire card:

Earn 40,000 bonus points when you spend $3,000 on purchases in the first 3 months from account opening. That's $500 in travel when you redeem through Chase Ultimate Rewards™.

So if you open a card, use it to buy stock for 2 months and then sell the stock (or keep it) you'll make ~400 bucks right out of the gate.

Anyone want to try?
http://www.nerdwallet.com/card-details/card-name/Chase-Sapphire-Preferred

wtjbatman

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #17 on: January 23, 2014, 02:38:00 PM »
That's what I'm doing. Although someone who is just buying and then selling the stock may not benefit as much if the stock drops, I actually intend to buy and hold. But I'm definitely looking forward to fulfilling some new CC bonuses.

I have pending CC transactions of $500 and $2500. One time purchases. Which definitely flies in the face of that CC "limit" in their FAQ, assuming the transactions go through :)

massmustache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #18 on: January 23, 2014, 06:20:21 PM »
Can you update and let me know how it goes?

Also, what CCs are you using?  I used Sapphire for new furnace... at the time got 500 bucks off (using the CC).

EDIT
Ok, I am in.  Discover is offering 150 for purchase of 750 in first 3 months.  20% off my stock purchase.  Sounds good to me.  Update if you can.
« Last Edit: January 23, 2014, 06:29:34 PM by massmustache »

kudy

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #19 on: January 23, 2014, 06:49:29 PM »
Quote
Discover is offering 150 for purchase of 750 in first 3 months.

I just applied for this one too - I wasn't given an immediate approval, so I am wondering if for some reason I was rejected - did you get an instant approval?

massmustache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #20 on: January 23, 2014, 07:05:39 PM »
I did not... and was surprised.  I have over 800 credit score... so must be typical.  I hate waiting.

dragoncar

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #21 on: January 23, 2014, 07:57:49 PM »
For the short-term gamers: Maybe short sell/use options in your brokerage to hedge a loss.

wtjbatman

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #22 on: January 24, 2014, 08:22:10 AM »
Can you update and let me know how it goes?

Also, what CCs are you using?  I used Sapphire for new furnace... at the time got 500 bucks off (using the CC).

EDIT
Ok, I am in.  Discover is offering 150 for purchase of 750 in first 3 months.  20% off my stock purchase.  Sounds good to me.  Update if you can.

So far I've done the following:

Funded the account and purchased three stocks at $10 each using my Fidelity Amex Investment Rewards card (2% cashback on all purchases)
Funded the account with $500 using a OneVanilla prepaid Visa card, stock purchase is pending
Funded the account with $2500 using my Citibank ThankYou Preferred (30,000 bonus miles after first $4500 spent in 9 months, 1% cashback on all purchases, 2% on travel/entertainment), stock purchase is pending

Tyler

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #23 on: January 24, 2014, 03:19:19 PM »
Just for the record for any investing newbies who might be reading this thread, buying stock with a credit card to get the cash back and immediately paying off the bill is an interesting loophole to save a few dollars.  But buying stocks with a credit card because you don't otherwise have the money to invest is a horrible idea that you should never do. 




« Last Edit: January 24, 2014, 03:21:25 PM by Tyler »

wtjbatman

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #24 on: January 24, 2014, 04:18:19 PM »
Just for the record for any investing newbies who might be reading this thread, buying stock with a credit card to get the cash back and immediately paying off the bill is an interesting loophole to save a few dollars.  But buying stocks with a credit card because you don't otherwise have the money to invest is a horrible idea that you should never do.

But the stock market gained 30% in 2013, if I max out all my credit cards and pay them off at 20% APR that means I'm coming out way ahead!

Left

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #25 on: January 24, 2014, 06:17:37 PM »
hehe, but if you maxed out your CC and paid income tax on it, you still come out behind :D

seattlecyclone

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #26 on: January 25, 2014, 11:06:47 AM »
Looks like an interesting concept. It seems to me that if you invested in a broad enough range of the available stocks, you could probably track the returns of the S&P 500 pretty closely, but you could also take advantage of tax loss harvesting to bring up your after-tax return compared to an index fund.

Can someone who already uses the site tell me if their trading interface allows you to specify specific share lots when selling, or if they make you sell in first-in-first-out order? Their site isn't clear on that point.

massmustache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #27 on: January 27, 2014, 09:49:21 AM »
FYI, they don't accept discover.  Doh!

massmustache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #28 on: January 27, 2014, 09:52:02 AM »
Also:

"Karin C:
Thank you for contacting LOYAL3. How may I help you today?
You:
Any plans to accept Discover Card?
Karin C:
I don't know of any timeline for taking Discover
You:
Also, is there a limit to the amount I can purchase on a credit card?
Karin C:
as of now, purchases can be funded via checking account, Visa and Mastercard
Karin C:
the only limit is the investment limit for the platform, which is $2,500 per stock per 30days
You:
Ok... Thanks!"


seattlecyclone

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #29 on: January 27, 2014, 12:37:14 PM »
Can someone who already uses the site tell me if their trading interface allows you to specify specific share lots when selling, or if they make you sell in first-in-first-out order? Their site isn't clear on that point.

I sent a message through their web Q&A form, and they said all sell orders are processed on a FIFO basis. That does limit the opportunity to harvest losses. I give them credit for actually responding to questions in a timely manner, though.

sheepstache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #30 on: January 27, 2014, 04:33:29 PM »
Interesting, Seattle.  Also, if you transfer stocks to a different brokerage are you allowed to use your own records to keep track?  Because you can transfer stuff out of Loyal3 with no fee.

Cyrano

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #31 on: January 27, 2014, 05:34:11 PM »
Interesting, Seattle.  Also, if you transfer stocks to a different brokerage are you allowed to use your own records to keep track?  Because you can transfer stuff out of Loyal3 with no fee.

If Loyal3 reports the lots' cost basis to the new broker when the shares are transferred, you can sell under any cost basis method the new broker allows.

wtjbatman

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #32 on: February 02, 2014, 07:34:36 PM »
Just an update. I've successfully used Loyal3 to purchase $7500 in stocks using two new rewards credit cards (Citi ThankYou Preferred and Capital One VentureOne), which was enough spending to earn both cards' sign-up bonuses. I then sold the stocks and can pay off the cards (actually I maxed out my IRA for 2014 first).

Everything went smoothly, there are just a couple things to realize. One, you can only buy up to $2500 of a single stock in a month. Two, each step of the process takes two or three business days to complete. The initial transfer of funds into your Loyal3 account, the actual purchase of the stocks to where you are shown as owning the stocks, selling the stocks, having your account credited with the funds, and then the transfer of money to your bank. Everything in total has taken approximately two weeks.

Day trading this is not. But for my needs, it worked pretty well. Even people who aren't interested in investing could use Loyal3 as a way to do credit card churning.

dragoncar

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #33 on: February 03, 2014, 01:08:23 AM »
Just an update. I've successfully used Loyal3 to purchase $7500 in stocks using two new rewards credit cards (Citi ThankYou Preferred and Capital One VentureOne), which was enough spending to earn both cards' sign-up bonuses. I then sold the stocks and can pay off the cards (actually I maxed out my IRA for 2014 first).

Everything went smoothly, there are just a couple things to realize. One, you can only buy up to $2500 of a single stock in a month. Two, each step of the process takes two or three business days to complete. The initial transfer of funds into your Loyal3 account, the actual purchase of the stocks to where you are shown as owning the stocks, selling the stocks, having your account credited with the funds, and then the transfer of money to your bank. Everything in total has taken approximately two weeks.

Day trading this is not. But for my needs, it worked pretty well. Even people who aren't interested in investing could use Loyal3 as a way to do credit card churning.

Thanks for the update.  I'll seriously consider using this to build a pseudo index fund... does anyone have the capability to figure out which set of loyal3 stocks has the highest correlation with s&p 500?

wtjbatman

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #34 on: February 03, 2014, 03:05:46 AM »
I'll seriously consider using this to build a pseudo index fund... does anyone have the capability to figure out which set of loyal3 stocks has the highest correlation with s&p 500?

I like that idea.

When I looked at the stocks they offer, the best ones I found (dividend focused but really they are all very sound) are Apple (AAPL), Coca-Cola (KO), Hasbro (HAS), Intel (INTC), Kellog (K), Mattel (MAT), McDonald's (MCD), Microsoft (MSFT), PepsiCo (PEP), Target (TGT), Unilever (UL), and Wal-Mart (WMT). If you really wanted it might not hurt to throw in a few others like Disney, Berkshire Hathaway, Mondelez, etc. Figuring out how those stocks' market capitalizations would work out in your own personal index fund would be interesting, but definitely beyond the scope of my abilities.

seattlecyclone

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #35 on: February 03, 2014, 02:59:15 PM »
Loyal3 sells 38 companies currently in the S&P 500 (FOXA, AMZN, AAPL, BRK.B, BBY, KO, DISCA, DIS, DPS, EA, FB, FTR, GPS, GOOG, HAS, HSY, INTC, K, KSS, LB, M, MAT, MCD, MSFT, MDLZ, MNST, NKE, PVH, PEP, RL, SBUX, TGT, TWX, VFC, VIAB, WMT, YUM, and YHOO). On first glance, this seems like a relatively diverse group of retailers, manufacturers, restaurants, technology companies, media companies, and a few others.

The S&P 500 index is weighted by market cap. I made a spreadsheet with these stocks weighted by market cap (as of 1/1/2013). Buying on that date and holding throughout 2013 would produce a 27% price increase by 1/1/2014, plus dividends. SPY returned 32.13% (including dividends) over that time period. That's pretty comparable.

One word of warning about this approach is that market-cap (either on 1/1/2013 or today) would have caused you to invest half your money in just five companies: Apple, Google, Wal-Mart, Microsoft, and Berkshire Hathaway. This effect (large percentages of your investment going to the largest few companies) is present in all weighted indexes, but it's exacerbated by the fact that your "index" here only includes 38 companies.

wtjbatman

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #36 on: February 03, 2014, 07:52:43 PM »
Good stuff seattlecyclone. Obviously it's hard to recommend anyone put 50% of their money into five companies, but at least they are industry stalwarts that could be a healthy part of anyone's portfolio.

For now I'm going to use Loyal3 for credit card churning and for taxable holdings of the best dividend stocks.

tomq04

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #37 on: February 04, 2014, 09:16:30 AM »

Thanks for the update.  I'll seriously consider using this to build a pseudo index fund... does anyone have the capability to figure out which set of loyal3 stocks has the highest correlation with s&p 500?


You could consider tracking the Beta, closer to 1 it is, the closer it follows the "broad market"

massmustache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #38 on: February 05, 2014, 01:32:58 PM »
Just an update. I've successfully used Loyal3 to purchase $7500 in stocks using two new rewards credit cards (Citi ThankYou Preferred and Capital One VentureOne), which was enough spending to earn both cards' sign-up bonuses. I then sold the stocks and can pay off the cards (actually I maxed out my IRA for 2014 first).

Everything went smoothly, there are just a couple things to realize. One, you can only buy up to $2500 of a single stock in a month. Two, each step of the process takes two or three business days to complete. The initial transfer of funds into your Loyal3 account, the actual purchase of the stocks to where you are shown as owning the stocks, selling the stocks, having your account credited with the funds, and then the transfer of money to your bank. Everything in total has taken approximately two weeks.

Day trading this is not. But for my needs, it worked pretty well. Even people who aren't interested in investing could use Loyal3 as a way to do credit card churning.

Most important question... what's the time between purchase and selling.  It looks like 2 days max.  But I want to minimize my window of potential losses... 2 days kinda sucks.

I am 5k in.  See how it goes.

sheepstache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #39 on: February 05, 2014, 02:06:13 PM »
Yes, it has been two business days for both my purchases, assuming you get it in by 2pm EST. 

When I got the most recent confirmation email in the afternoon I went and looked at the market price of the stock online it was only a little cheaper than what I got it for and I assume that was because the price was dropping all day.

taxideataxus

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #40 on: February 05, 2014, 06:04:22 PM »
I am in on this as well.  Hopefully nobody here went for TWTR https://www.google.com/finance?q=NYSE%3ATWTR&ed=us&ei=p93yUviKGdT7qAHTzwE.

wtjbatman

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #41 on: February 06, 2014, 06:04:28 AM »

Most important question... what's the time between purchase and selling.  It looks like 2 days max.  But I want to minimize my window of potential losses... 2 days kinda sucks.

If you ask to sell before 2PM ET they claim it's same day. You won't get your money for several days. Keep in mind same day, not same minute or even same hour that you try to sell. So if you're trying minimize potential losses on a fire sale... you're gonna have a bad time.

massmustache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #42 on: February 06, 2014, 06:54:58 AM »
I have two positions.

Google @ 1138.16 (2.5k)
Amazon @ 347.95 (2.5k)

Feel free to laugh at me if either tanks.

soccerluvof4

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #43 on: February 06, 2014, 07:40:52 AM »
I just have one question and may seem silly. Are the prices when you buy and sell at the norm delay/current price? to me thats more important then waiting time to get my funds.

Thanks,
DB

dragoncar

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #44 on: February 06, 2014, 12:40:25 PM »
I just have one question and may seem silly. Are the prices when you buy and sell at the norm delay/current price? to me thats more important then waiting time to get my funds.

Thanks,
DB

Not silly I was wondering this myself.  They could do it a few different ways and I don't know the answer

massmustache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #45 on: February 07, 2014, 02:19:15 PM »
Oops... ok.  Here's an update.

Made a purchase on the 5th of Google and Amazon.  Got confirmation on the 7th around 2pm ET that it went through.

Prices are:

Google @ 1,159.96 (2.5k)
Amazon @ $354.59 (2.5k)

That would be great if I could initiate a sale immediately since they were both roughly 1% up.  No indication of when my purchase went through but I am guessing it was close to when I was notified.

The thing is, if I initiate a sale AFTER 2pm ET then they say it will not be filled till AFTER 2:30PM ET the next trading day (that's Monday).  I am going to wait to initiate the trade on Monday till close to 2pm... assuming that they aren't substantially down.  With the CC bonus and cash back rewards I have roughly a 3.5% buffer (can break even if they are 3.5% down).

Timing on this is a bit tough to make it worthwhile for quick turnaround (as has been mentioned).

There's a probability calculator online (http://www.optionistics.com/calculators/probability-calculator/SPY) but the data in the free version is delayed.  It looks like in retrospect McDonalds is more stable than my purchases... so maybe this could help.

dragoncar

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #46 on: February 07, 2014, 03:50:58 PM »
It looks like they are giving you the end-of-day price, the day following your order.  Kinda like a NAV.  Which makes sense because they are set up to sell fractional shares so it's almost like buying a mutual fund (comprising only a single stock).

massmustache

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #47 on: February 10, 2014, 01:30:16 PM »
Oops... ok.  Here's an update.

Made a purchase on the 5th of Google and Amazon.  Got confirmation on the 7th around 2pm ET that it went through.

Prices are:

Google @ 1,159.96 (2.5k)
Amazon @ $354.59 (2.5k)

That would be great if I could initiate a sale immediately since they were both roughly 1% up.  No indication of when my purchase went through but I am guessing it was close to when I was notified.

The thing is, if I initiate a sale AFTER 2pm ET then they say it will not be filled till AFTER 2:30PM ET the next trading day (that's Monday).  I am going to wait to initiate the trade on Monday till close to 2pm... assuming that they aren't substantially down.  With the CC bonus and cash back rewards I have roughly a 3.5% buffer (can break even if they are 3.5% down).

Timing on this is a bit tough to make it worthwhile for quick turnaround (as has been mentioned).

There's a probability calculator online (http://www.optionistics.com/calculators/probability-calculator/SPY) but the data in the free version is delayed.  It looks like in retrospect McDonalds is more stable than my purchases... so maybe this could help.

Sale went through.

Used a CC that gave 100 after first 500 spent.  Got 1.5% back.  So for 5k I got 175 bucks.  Here's the breakdown.

Sign up Bonus: 100
1.5% Cash Back: 75
Sale of Google: 13.59
Sale of Amazon: 50.75

Total Made: $239.34

Works out to be about 4.7% of my original investment.  If I had just spent 500 on the card my % would have been a lot better.  Without the sign up bonus it works out to 2.8%... not great.  If the stock had not risen it would just be the 1.5% cashback.

There are travel cards that yield 2.2%, that's a little better.  Even one that has a 400 for 5k deal.  Maybe that's worth it.

Happy to pocket my 239 bucks... Off the the bar.

ZMonet

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #48 on: February 14, 2014, 09:39:18 AM »
Thanks for the info.  Initiated yesterday night a CC purchase of Berkshire and McDonalds.  Figured those are two of the less volatile trades you can make.  Will attempt to sell as soon as the trade is executed.  I'll keep you updated.  So far:

2/13 4pm -- signed up and used CC to purchase $2500 Berkshire and $2500 McDonalds, received email immediately notifying me that transaction (not stock purchase) went through.
2/14 Morning -- Two $2500 charges show as pending on credit  card

« Last Edit: February 14, 2014, 09:46:57 AM by ZMonet »

ZMonet

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Re: Using a credit card to purchase stocks at Loyal3
« Reply #49 on: February 18, 2014, 12:41:12 PM »
UPDATE 2/18

2/18, 1:37 PM EST -- Received notice that I purchased $2500 of Berkshire at $115.05/share  (day range is 114.36 to $115.22).
2/18, 1:41 PM EST -- Received notice that I purchased $2500 of McDonalds at $96.22/share (day range is $95.54 to $96.57)
2/18, 1:52 PM EST -- Initiated sell orders for both stocks.

I have not received an email about my sell orders, but it does show in my pending transactions.  I'll be interested to see if the transaction goes through today (their FAQ indicates orders sent before 2PM are executed that day) or whether it doesn't happen until tomorrow.