What are the disadvantages of BUX Zero?
Do you want to know what the biggest disadvantages of BUX Zero are? In this article, we will discuss the disadvantages of the BUX Zero application, so you can make an informed decision.
[alert color=”blue”]Tip: do you want to know what the biggest advantages of BUX are? Read this article. [/alert]
Disadvantage 1: only available on your mobile phone
You can only use BUX Zero on your mobile phone. It’s nice to be able to open investments on the go. However, at BUX, you don’t have the option to use a desktop version. In practice, it’s a lot harder to open trades on a small screen. That’s why I like to use my computer to open trades.
Disadvantage 2: costs for exchange of currencies
BUX Zero advertises commission-free investing, but this doesn’t mean that investing is completely free. When you buy American stocks, you’ll have to pay money for the exchange of your euros into dollars. These costs amount to 0.25% of your total transaction amount, which can make your trading costs quite high.
If you want to invest small amounts, it is advantageous that you can invest without commissions. However, with BUX you pay an extra percentage in costs when you invest in US stocks, which can have a negative effect on your results when you invest with larger amounts of money. In this article we will discuss all costs at BUX in more detail.
Disadvantage 3: limited analysis possibilities
Since you can only use BUX Zero on your mobile phone, there are limited analysis possibilities. It’s not possible to perform analysis on the chart, which makes BUX limited for active trading.
However, BUX does offer regular updates and news items that can help you as an investor. This makes the application very accessible for novice investors.
Disadvantage 4: limited flexibility zero orders
With a zero order, you can always invest in shares and ETFs without any commission. This does have one clear disadvantage: your flexibility with zero orders is limited. With a zero order, your investment positions will only be executed at the end of the day, which means that the price could turn out to be either lower or higher. This limited flexibility is not essential if you are investing for the long term, but as an active trader, it is unfavourable.
Disadvantage 5: lending of securities possible
The terms and conditions of BUX Zero state that they can lend out securities to third parties. This may cause a counterparty risk: if the other party goes bankrupt, you may lose your shares. In practice, this is unlikely to happen, as this would ruin the reputation of BUX Zero immediately. Still, these kinds of conditions make a broker less transparent, which is a clear disadvantage for you as an investor.
Disadvantage 6: relatively limited supply
At BUX Zero, the range of stocks and ETFs is limited. You can find the most well-known shares and ETFs, but if you want to invest in more exotic products, you’ll be disappointed.
It is only possible to invest in European and American stocks, and this includes only the bigger names. If you want to invest in a company from Japan or in a small company from the Netherlands, you will have to find another broker.
The main disadvantages summed up
- You can only trade with your mobile phone
- The cost of currency exchange is high
- The analysis possibilities are limited
- Zero orders give limited flexibility
- Your securities can be lent out
- The trading options are limited at BUX Zero