With the new financial year craziness wearing off and we settle into our new normal, now is a good time to rethink your strategies. For this year in particular, it is essential that you do this. It is essential that small businesses are on the ball in thinking creatively. Here are some simple tips to Read More…
Helping Australians reach the US trading markets
Matt Leibowitz, founder of Stake, US stock trading platform
Fri 17 July 2020 - 6:17 amFeatured | Finance
After working in a multinational European trading company, a former lawyer apprentice decided to return to Australia and create Stake, Australia’s first platform for US stock trading.
Less than three years after its launch, Matt Leibowitz’s startup reached 100,000 customers this June.
As one of the companies that is thriving during the pandemic, Stake’s customer base is expanding fast – it reached a growth rate of 126 per cent of from January 2020 until now.
Stake was born out of Leibowitz’ frustration to trade US stocks within the Australian market.
“I was a trader at a high-frequency trading firm in Sydney and was sent over to the Chicago office, where I was based for over three years. I saw the amazing breadth and depth of opportunity available in the US stock market,” Leibowitz said.
He further explained, “When I returned home, I realised how difficult accessing those same opportunities were from outside the US.”
According to Leibowitz, stock trading, whether it is US or Australian stocks, should be easy and straightforward. However, to do so, many brokers have to fill in the form and pay a rather expensive fee. These create a complexity that makes stock trading challenging to do.
He said, “As a partner of a high-frequency trading firm if I couldn’t find my way through opening a US brokerage account, how was a retail investor going to be able to do it?”
“After that realisation, I made it my goal to make buying and selling US shares as seamless and affordable as possible for those who didn’t live in the US.”
Leibowitz decided to make Stake a commission-free brokerage. This means, unlike a shared trading platform that charges $20-30 AUD for each trade, Stake won’t charge the user for stock trading. Instead, Stake earns money only when users move money between AUD and USD. As Stake accounts hold money in USD this only happens on depositing and withdrawal and never on every trade.
“Stake has made it cheaper and easier to invest in these companies and directly trade in the US, easier than it is on the Australian market. There’s a natural demand for savvy investors to have access to more opportunity and pay less,” he explained.
US stocks and Australian markets
Although it is an Australia-based company, Stake currently only works within the US stock markets. According to Leibowitz, this is because more Australians developed the tendency to look up to the US market, especially during dire times.
“Australians see the opportunities in the US, especially when things are tough, like they have been during the pandemic, and are stepping into this huge market to make the most of them.”
Leibowitz said that Australians put their trust in the US market because of technology development.
“We focus solely on investing directly in the US stock market, the world’s largest stock market and home to the most well-known and disruptive companies, such as Google, Amazon, Tesla and newer names such as Peloton and Zoom,” he said.
“We’ve seen tremendous transfers into those sorts of names as these companies have been the beneficiary of the structural changes from the pandemic.”
Fast forward to present day in 2020, Stake is hitting more and more milestones, expanding itself beyond Australia.
Previously made just for Australian brokers, Stake is now available for the United Kingdom, Brazil and New Zealand.
“Our launch in Brazil marks the starting point for further expansion into LATAM and the continuation of our journey in building a company that changes investing on a global scale”, said Leibowitz.
LATAM is currently one of the largest airlines in Latin America with subsidiaries in Argentina, Brazil, Colombia, Ecuador, Paraguay and Peru.
Trade values are also up significantly, with $300 million USD exchanged in through the platform.
Leibowitz said, “We’re on a mission to change the way the current and future generation of investors make their mark. Our growth targets for the rest of 2020 are ambitious, hoping to double our customer base in 2020, and tripling from there in 2021. We currently have a foothold in the UK, but we want the rest of Europe to have access to Wall Street so we will be expanding in the near future,”
Trading during the pandemic
Even with the current pandemic, Leibowitz said that the company is thriving, as more media outlets are emphasising the trading market during this time. More Australians are developing an interest in stock trading.
“There’s more interest in the stock market both at home and abroad – news is centred around global themes around COVID-19, such as the infection numbers and also how it is impacting the economy and the stock market,” he said.
Although Leibowitz admits that the current situation makes the market more volatile, it also makes room for opportunities for some. The critical thing for Leibowitz is to managing the risk in stock trading. Especially for up and coming traders, Leibowitz advised them to start small instead of going big.
“This means focusing on your downside, not your upside. If you keep losses small, you’ll be around long enough to learn how to make money,” he said.
- July 17 2020 Helping Australians reach the US trading markets
- July 16 2020 Fintech leaders raise almost $4 billion in Q2 amid pandemic
- July 10 2020 Two actions SME owners must master as end of JobKeeper approaches
- July 9 2020 Finding money to rebound from the pandemic