Lang & Schwarz Highlighted Review

Lange & Schwarz user-ratings: $0
9.4/10
9.4 of 10 points 1 reviews
  • Asset varierity - 10/10
    10/10
  • Trading platform - 10/10
    10/10
  • Support - 10/10
    10/10
  • Fees - 8.5/10
    8.5/10
  • Deposit/Withdrawal - 8.5/10
    8.5/10

Facts about the company:

  • Type: Stock Broker
  • Regulation: BaFin (Germany) 
  • Minimum deposit: $0
  • Demo account: not available 
  • Markets:  Stocks, ETF, Indices, Fonds, Certificates 
9.4/10
Comments Rating 9.4/10 (1 review)

Pros

  • Headquarter inside EU
  • Regulated in Germany 
  • Great academy offerings
  • Various assets to trade 
  • Low commissions

Cons

About Lang & Schwarz

Currently, “Lang & Schwarz” has been generating an average profit of around 5 million euros per year over the last five years. The broker can realize this result with currently only 55 employees. The other key figures are also impressive. With a credit balance of around 102 million euros, this figure has almost quadrupled since 2014, while provisions of currently over 13 million euros have doubled since then. In 2018, the stock corporation still paid a dividend of 1.70 euros. This corresponded to a return of 10%.

Lange & Schwarz Landing Page

How did “Lang & Schwarz” get there? Together with sino AG or Fintech Group AG, to which the broker “Flatex” also belongs”, the company is one of the brokers listed on the German stock exchange as a public limited company. Its beginnings go back to the 90s. A look at the historical development is worthwhile.

Rise of the “Lang & Schwarz Börsenmakler GmbH”

At the latest with the appearance of Microsoft’s “Windows95”, the digital world changed enormously. This also and especially applied to the stock exchange. Already in 1996, the “Lang & Schwarz Börsenmakler GmbH” was founded as a medium-sized company in these changes. It remains a matter of speculation whether the founders at that time foresaw the “New Market” that would emerge just one year later. However, the original Nemax index, which was founded in 1997 and became the Nemax50 in 1999, probably played a major role in the rise of “Lang & Schwarz Börsenmakler GmbH”.

After an initial capital increase in 1997, “Lang & Schwarz Börsenmakler GmbH” was transformed into a stock corporation in 1998, only two years after its foundation, the “Lang & Schwarz Wertpapierhandel AG” with headquarters in Düsseldorf. This was accompanied by the start of order-book management, which is hardly used any more today. An order-book manager determines stock exchange prices in a regulated market if these are not determined via an electronic trading system.

The rapid growth of “Lang & Schwarz” continues

Three years after its foundation, “Lang & Schwarz Wertpapierhandel AG” received a license to conduct banking business and started with a pure internet bank called “pulsiv AG”, from which the current “S-Broker” emerged. The fast-growing company started for the first time with off-exchange share trading and was able to win eight partner banks for this purpose, which were connected to the trading. In addition, “Lang & Schwarz” received so-called “designated sponsor” mandates at the national and international levels. Stockbrokers with “designated sponsor” mandates are active in the Xetra trading system and ensure the necessary liquidity in continuous trading on behalf of other issuers as market makers.

The year 2000 marks a turning point in the history of the company’s rise to the top. “Lang & Schwarz” began to issue its own derivative products on many different underlying instruments. Turbo and theme certificates as well as index certificates, turbo certificates, and warrants were issued on shares and indices. The issues were very successful and made a significant contribution to further growth in the coming years.

The success was so great that the “Lang & Schwarz Wertpapierhandel AG” participated in 2001 in the electronic trading system “Quotrix” of the Düsseldorf Stock Exchange and in a number of other small companies. The shares in today’s S-Broker, however, were sold again. The shares in “Quotrix”, now called “vwd transaction solutions AG”, were sold by “Lang & Schwarz” in 2005. The withdrawal from order book management was also significant for the progressive development of electronic trading. Under the new technical circumstances, this made little sense.

“Lang & Schwarz” becomes the top dog in Germany

With its own range of derivatives, the success of “Lang & Schwarz Wertpapierhandel AG” continued to grow. In 2002, the still quite young company took over “designated sponsor” activities for the first time as an outsourcing partner for third-party banks. In 2003, the broker now also issued its own index-tracking turbo warrants. In 2004, the range of leveraged products was again considerably expanded and was extremely successful. In 2005 “Lang & Schwarz” finally became a listing partner of Deutsche Börse AG.

It was not until 2006 that the company can once again be considered a real milestone in its history. After a small change of name to “Lang & Schwarz Wertpapierhandelsbank AG” and the start of listing on the regulated market, the broker, which was now also an official bank, accompanied the first IPO (Initial Public Offering – the first IPO of a company). In the same year, they received a mandate to assist in the new Entry Standard of Deutsche Börse AG.

This “Entry Standard” was a purely private stock exchange segment of Deutsche Börse. It was therefore not subject to the transparency requirements of the legislator, but only to those of the stock exchange itself. These were somewhat lower than those of the “Prime” or “General” Standard, and were therefore mainly aimed at institutional investors due to their higher risk characteristics.

At the same time, “Lang & Schwarz” was able to obtain a listing of its derivative products on the EUWAX in Stuttgart, as well as the start of off-exchange trading of the fund and ETF products. This was followed by a listing on the Austrian stock exchange in Vienna and the start of trading in so-called “SFDs”. These derivatives were developed and issued by “Lang & Schwarz” alone.

The 421-page base prospectus on derivative products states on page 13.

Record issues by 2010 and portfolio expansion

In the three years that followed, “Lang & Schwarz” made a name for itself with several developments. In 2007, the broker was the first to introduce over-the-counter brokerage-free stock trading. In the following year, it reached the limit of 10,000 own issues of derivative products and even placed television advertisements for the company for the first time. The range of derivatives offered was expanded to include equity and commodity turbo certificates.

In 2009, “Lang & Schwarz” started over-the-counter bond trading and switched to the above-mentioned “Entry Standard” segment of Deutsche Börse. The restructuring of the company also began this year. For this purpose, the stock corporation initially founded “Lang & Schwarz Broker GmbH”, with which the business areas of “Financial Services” were to be spun off.

The restructuring was completed in 2010 with the spin-off of the “TradeCenter” into “Lang & Schwarz TradeCenter AG & Co. KG”. With the establishment of these subsidiaries, the original “Lang & Schwarz Wertpapierhandelsbank AG” also transferred the corresponding business areas requiring approval. It thus relinquished its own licenses to Bafin.

The year was crowned, however, with another record issue of over 15,000 derivatives. In addition, more than 4,000 shares, funds, bonds, and ETP securities could now be traded over the counter via “Lang & Schwarz”. But already in 2012, the offer increased rapidly to 35,000 issues. In addition, there was the first issue of “Wikifolio” certificates. “Lang & Schwarz” played a key role in this as a co-initiator and, with its outsourced “TradeCenter”, acted both as market maker of the platform and, with “Lang & Schwarz Broker GmbH”, as an issuer of the Wikifolio index certificates.

The times of the off-exchange start of trading were brought forward to 07:30, while the quoted securities were increased by ETFs of the leading providers. In addition, by 2012 there were another 1400 tradable equity securities and over 1400 funds.

“Long & Black” and the Wikifolio

The issue of Wikifolio certificates should not stop there. Due to the success of the platform, “Lang & Schwarz”, which had now also changed its name to the shorter “Lang & Schwarz AG”, decided to acquire a stake in “wikifolio Financial Technologies AG” in 2013. As a result, the investment universe for the model portfolios was expanded from 3,000 to around 40,000 securities. This also included products from HSBC and from “Lang & Schwarz AG” itself.

After the Wikifolio index certificates were also approved for trading in Switzerland in 2015, the company issued roof-top Wikifolios based on Wikifolio index certificates for the first time and achieved first place in the Certificates Award 2015 with this project. By 2016, “Lang & Schwarz” had already issued over 5,000 Wikifolio certificates.

“Lang & Schwarz” storms the top in the German broker market

After “Lang & Schwarz” had already clearly consolidated its market position, the next and so far last major coup of the Düsseldorf stock corporation followed in 2016. The electronic trading system “Lang & Schwarz Exchange” (short: LS Exchange) was launched in cooperation with BÖAG AG as the responsible body for the stock exchanges in Hamburg and Hanover. This is operated purely technically by ” Lang & Schwarz TradeCenter AG & Co. KG” as a market maker. Connected to it are various commercial banks, brokers, and credit institutions, which settle their customers’ orders via the “LS Exchange”. These institutions initially included a number of well-known names:

  • Consorsbank
  • DAB BNP Paribas
  • Onvista
  • MaxBlue
  • ViTrade
  • Flatex
  • Targobank
  • Hellobank
  • Finance.net
  • stock exchange-live.at
  • 1822direct
  • and a few more.

Since March 2019, the S-Broker as well as “Comdirect” and also “Trade Republic” with their free smartphone trading have been added, which should boost the turnover of “LS Exchange”. In addition, the off-exchange trading hours have been extended from 07:30 to 23:00, while “Lang & Schwarz” is advertising that trading is to be carried out without brokerage and exchange fees. The functional website of “LS Exchange” will be examined in more detail below.

For the sake of completeness, it should be mentioned that “Lang & Schwarz” will also start its market-making activities for shares and ETFs on the Vienna Stock Exchange in 2017. In 2018, the broker also succeeded in doing the same on the BX Swiss. Furthermore, an important collateralization solution for Wikifolio certificates was found in 2017. According to information on the Wikifolio website, all certificates ever issued by the platform are protected against the insolvency of the issuing house. Accordingly, “Lang & Schwarz” provides the equivalent value of all outstanding Wikifolio certificates in cash or securities to meet obligations.

For the sake of completeness, it should be mentioned that “Lang & Schwarz” will also start its market-making activities for shares and ETFs on the Vienna Stock Exchange in 2017. In 2018, the broker also succeeded in doing the same on the BX Swiss. Furthermore, an important collateralization solution for Wikifolio certificates was found in 2017. According to information on the Wikifolio website, all certificates ever issued by the platform are protected against the insolvency of the issuing house. Accordingly, “Lang & Schwarz” provides the equivalent value of all outstanding Wikifolio certificates in cash or securities to meet obligations.

Lang & Schwarz AG” as the operational holding company

In essence, Lang & Schwarz AG is nothing more than a holding company with two subsidiaries. It generates its own and primarily derivative products. However, these are sold solely via the “TradeCenter” of “Lang & Schwarz TradeCenter AG & Co. KG” alone. In addition, the TradeCenter acts as a market maker for shares, funds, and bonds, providing the prices for the “LS Exchange”.

In contrast, “Lang & Schwarz Broker GmbH” is only presented as a “specialist bank” in the area of trading in securities and financial instruments. Apart from this, its activities as a “designated sponsor” on the electronic trading platform Xetra are more in the foreground, in addition to providing advice and support for going public (IPO) and implementing share buyback programs of listed companies. Classic brokerage is thus more oriented towards institutional clients.

The “LS Exchange” website of “Lang & Schwarz

Basically, there is no difference between the two websites of the “TradeCenter” and the “LS Exchange”. The difference is often only apparent in the website address, where the “tc” of the former is replaced by a simple “x” in the latter. Just as on the sparse and for retailers actually uninteresting website of “Lang & Schwarz Broker GmbH”, the menu navigation is spartan and does not go beyond the classification into tradable products.

Nevertheless, the site offers a certainly added value. Because in addition to the statistics on “Tops & Flops”, “Turnover” or “Volume Peak”, which are updated in real-time, “The latest trades” can be viewed below. The list is updated with every new trade executed by a broker linked to “Lang & Schwarz”. If you are already trading with an L & S partner, you can try it yourself. With a good Internet connection, your own trade usually appears there within fractions of a second after the order has been executed.

In addition to a smart stock filter, which can be found in the bottom area, there is a small feature that should inspire statistics fans. With a click on “Service” and the selection of “Quotation sheet,” you will receive a list of daily quotations dating back three years. There, all trades that were executed via “Long & Black” within one day are listed alphabetically.

Support available:am 07:30 to 11:00 pm
Telephone:00490211-138 40 0
Adress:public-relations(at)ls-d.de
Languages:1

Is the share of “Lang & Schwarz AG” interesting for trading?

Of the almost 3.2 million shares of “Lang & Schwarz AG” (WKN 645932), 12% are held by larger individual investors and the remaining 88% are in free float. Since 2013, the stock corporation has been paying a regular dividend, which, with the exception of 2017, has risen regularly and from an initial $0.27 to a final $1.70 in 2018. However, the chart is worrying. After the share price rose from $15.00 in mid-2017 to around $37.50 in mid-2018, it has since then and currently fallen again to $13.20.

Due to substantially increased tax provisions and lower sales revenues compared to the previous year, earnings in 2018 were far below the previous year’s result despite the substantially higher cash. There are virtually no analysts’ opinions on “Lang & Schwarz AG”. And it is still only listed in the “Basic Board”, the successor segment of the “Entry Standard”. In this respect, an investment may not make much sense or even be possible despite the relatively dominant market position, and the liquidity of the share may not be guaranteed.

“Lang & Schwarz” indispensable for the retail trade

For private customers in particular, of course, the greatly expanded and, above all, temporally extended range of products in over-the-counter trading is of particular benefit. Admittedly, some caution should be exercised with regard to the off-exchange spreads. However, in addition to the shares at risk of spreads, certificates can also be traded on virtually all underlying instruments. With the launch of the “LS Exchange” at the latest, it will be almost impossible for retailers to avoid “Lang & Schwarz” in both equity and derivatives trading. Whether consciously or unconsciously. However, this has advantages not only in terms of trading liquidity but also in terms of trading costs. After all, companies such as “The Trade Republic” or others have only been able to offer free trading since the introduction of the “LS Exchange”. Others will probably follow. And that is why “Lang & Schwarz” will probably remain the top dog for the foreseeable future.

Conclusion on “Long & Black

From the very beginning, “Lang &Schwarz” has obviously taken a different path than conventional brokers such as “sino AG”. Anyone who tries to register for trading with “Lang & Schwarz” will not find a way to do so. This is because the broker has concentrated primarily on the issue of derivative products and acting as a market maker for connected partners. Other financial services in the area of trading are mainly aimed at institutional clients only.

Nevertheless, “Lang & Schwarz” is a national global player. As an important market maker and thus also a major liquidity provider, the company is an indispensable part of the trading business. This unique selling point is complemented by the great success they have had with their involvement in Wikifolio.


Most asked questions:

Is international trading possible?

Although Lang & Schwarz is a global player, this only is the case for German traders. The website as well as all information and the customer service are only available in Germany. Thus, Lang & Schwarz can’t be recommended for international traders.

Is Lang & Schwarz regulated?

Lang & Schwarz takes protection and regulations very seriously. According to this, Lang & Schwarz is a regulated broker. It is regulated by the German BaFin.

What trading instruments are offered?

Lang Schwarz is mainly a broker for stocks. Besides that, there are also other trading instruments available such as ETFs, certificated, Indices, ETFs, and more.

Are there education offers available?

Lang & Schwarz offers trading know-how and contributes info material for all traders such as news, blog posts, and more.

One Response

  1. Andre Witzel September 21, 2020

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