Review and User-ratings of the broker Trade Republic

Trade Republic user-ratings $0
  • Asset varierity - 0/10
    0/10
  • Trading platform - 0/10
    0/10
  • Support - 0/10
    0/10
  • Fees - 0/10
    0/10
  • Deposit/Withdrawal - 0/10
    0/10

Facts about the company:

  • Type: Forex, Stocks, and CFD broker
  • Regulation: BaFin (DE)
  • Minimum deposit: $0
  • Demo account: Not available
  • Markets: 40.000+ Forex, derivatives, shares, stocks, ETFs, CFDs
6.7/10
Comments Rating 6.7/10 (1 review)

Pros

  • Regulated by the strict guidelines of the German BaFin
  • No Minimum deposit 
  • Large variety in available markets
  • Innovative self-designed App for trading
  • Very long trading hours

Cons

  • No demo account available
  • Trading via PC is not possible
  • No additional educational material for beginners
  • Stop-loss order is missing

The story behind Trade Republic

The genesis of “Trade Republic” goes back to the year 2011. There, two of the three founders met at a university. Christian Hecker studied business administration and philosophy, while Thomas Pischke focused on physics with an emphasis on quantum computing. Marco Cancellieri, who studied media informatics and had already made a name for himself with successful app projects in the media, automotive, and logistics industries, did not join the company until 2015.

Because of their similarities in terms of investment, the three decided to found the company “Trade Republic” in 2015. After the first steps had been taken, the three founders inspired the broker “Sino AG” for their business model of stock trading exclusively on the smartphone. Sino joined the startup as a strategic investor in 2017. Subsequently, Ingo Hillen took over the management of Trade Republic as a long-time managing director of Sino AG. At the same time, he brought Karsten Müller with him, who as legal advisor already accompanied the securities trading at Lang & Schwarz AG and Sino AG in legal matters.

Screenshot of the Trade Republic landing page

After two years of preparation and development, “Trade Republic” obtained a license as a securities bank in December 2018. But not only that. At the official launch on 9 January 2019, the broker announced its cooperation with SolarisBank for the safe custody of client funds. The cooperation with HSBC should from now on serve the secure processing of securities transactions. And finally, a cooperation with the broker Lang & Schwarz AG ensured the trading quality with the electronic trading system LS Exchange operated at the Hamburg Stock Exchange. From this date, it was possible to register for trading in shares and ETFs.

In February 2019, “Trade Republic” started to activate the first customers for trading. According to its own statements, “several thousand interested parties” had already registered in the four weeks before. After the stability of the systems had probably been ensured, the opening of a securities account was possible for everyone within 10 minutes at the beginning of May. With a 25-member team, “Trade Republic” finally started commission-free trading without any custody account fees and negative interest.

In mid-July 2019, “Trade Republic” went one better. In a press release, the startup announced that derivatives of trading partner HSBC were now also available in the broker’s portfolio. Since then, Trade Republic has been able to trade certificates as well as KO notes on all conceivable underlying for only 1.20 Dollars flat-rate third-party fees per purchase and sale.

Due to the rapid influx of interested customers and the strong increase in registrations within a very short time, “Trade Republic” managed to obtain the “Proof of Concept”. While Sino AG had previously financed the development of the company as an investor, the way was now clear for a “Series A” financing round to look for further investors and venture capital. With the entry of the internationally positioned VC investor “Creandum” (Spotify, Klarna) and the Berlin co-investor “Project A”, “Trade Republic” received another 11 million Dollars.

By this time, the new broker had, according to its own information, already collected 20 million dollars in customer funds. Currently, “Trade Republic Bank GmbH” operates under the name “Trade Republic Bank GmbH” according to the imprint in Berlin but has its headquarters in Düsseldorf. The GmbH is also entered in the commercial register there.

Facts about the history of the company:

  • founded in 2015
  • started commission-free trading
  • got a license as a security bank in 2018
  • launched in January 2019
  • headquarters in Düsseldorf, Germany

What Trade Republic promises in terms of benefits

The credo of “Trade Republic” is: “We are the broker for a new generation: more mobile, more intuitive, faster – and permanently commission-free. In order to meet these criteria, the company initially comes up with a series of services to underline this. First and foremost, of course, is trading alone via smartphone and from anywhere in the world. The founders do not use any traditional trading platform for this but have programmed their own app for this purpose. Experienced traders should not expect too much to anything here. Trading on the PC is not possible and not intended.

Trading via App:Yes
Trading via PC:No

The tradable portfolio at “Trade Republic” includes more than 6500 German and international stocks. Whether this number is correct cannot be checked, of course. But one might believe it since the data finally comes from the LS Exchange. After all, during the test period, it was also possible to find relatively exotic stocks such as

  • the “National Bank of Greece”
  • Hua Hong Semiconductor (Small Cap in China)
  • Itaú Unibanco (Brazil)

without any problems. Only the shares of Spvgg Unterhaching were not (yet) available, whose highly regarded IPO currently took place four days ago.

Derivatives and ETFs at Trade Republic

Trade Republic” makes exclusive use of its partner HSBC for more than 40,000 derivatives. However, these currently only include KO certificates and warrants. For shares tradable in the app, these certificates can be displayed very easily via the watch list. However, if you want to trade HSBC certificates on other underlying such as indices, currency pairs, or precious metals, you can only do this in the securities search with the help of the WKN, which you need to know from other sources.

DerivativesETFs
Over 40,000More than 500

The ETF range is also very attractive. With more than 500 ETFs, everyone who wants to invest their money in this area should find the right one for them. The search is also tricky here and invites you to try it out. Entering ‘a’ in the search line, for example, will narrow down the suggestions for ETFs on shares, Asia, or bonds. With ‘e’ it shows ETFs on Europe or on the Eurostoxx50, a ‘u’ gives suggestions for ETFs on the USA, corporate bonds or UK shares. Anyone looking for “MSCI World” will also quickly find the popular iShares ETF.

From the simplicity of trading to the administrative service

The range of services offered by “Trade Republic” is of course not exhausted by the portfolio of tradable securities alone. At the heart of the marketing is the statement that trading should be simple, understandable, and – apart from the flat-rate fee for external costs – free of charge for everyone. The following practical test shows whether this is the case. However, the desired simplicity can already be seen on the website.

“Trade Republic” does without any frills and gimmicks here. The website has only three pages, of which only two are of interest to the potential customer: the start page and the “About Us” page, which contains all relevant information and only a single download link to the price list in PDF format.

In this way, we also quickly find out that the long trading hours are after all from 07:30 am to 11:00 pm. Furthermore, there is no usual FAQ page, but the nine most important questions are already answered directly by “Trade Republic” in the lower part.

Taxes and Dividends

In addition, “Trade Republic” somewhat beautifully points out that they “take care” of the settlement of taxes. This of course only means that the final withholding tax is automatically withheld and paid in the case of positions closed in profit. The standard for a German broker. This includes the preparation of an annual tax certificate, participation in a corporate action, or the general meeting of a company, as well as the receipt of dividends.

The receipt of dividends, participation in a corporate action or the annual tax certificate is free of charge. However,

  • voluntary tax reporting
  • registration for a general meeting of shareholders
  • and other matters such as postal orders

are subject to fees. It should be obligatory to take a look at the 1-page, clearly structured price list.

Trade Republic in the ultimate practical test

Derivatives and ETFs for 1.20 Dollars with a German broker independent of the volume is worth at least a try. Therefore I called up the website of “Trade Republic” – on my PC of course -, entered my mobile phone number on the start page and clicked the “Get started” button. A few seconds later I received an SMS with a link to the opening of the depot.

The opening of the depot at Trade Republic

The broker advertises that it is possible to open the deposit in 10 minutes. In an interview with the online magazine “extraetf.com”, Christian Hecker, one of the three founders, even talks about a record time of only five minutes. Even though I naturally took a little longer due to my mobile phone phobia, you should still plan a little more time. The SMS link to the depot opening first leads to the installation request of the “Trade Republic” app.

My first installation attempt failed with the error message that my device is not compatible with the app version. Upon request I was informed that at least Android version 5.0 was required. Ok, I only had version 4.4.2 and I could not update it on my obviously too old phone. So I had to get a new phone.

After the “Trade Republic” app has been installed, you log in again with your previously entered mobile phone number. Thereupon you will receive a verification code again via SMS, which you have to enter in the following input mask. Afterward you have to enter your personal data. This includes, of course, name, place of residence, date of birth, bank account details, and tax residence. Later you will receive a mail to your own mail address, which also only needs to be confirmed.

The Trade Republic video identification

Finally, the core element of the opening of the depot follows the identification via video chat. A completely new experience for me. For this, of course, the mobile phone camera and the Internet connection must be active and the identity card must be kept ready. A smile is also one of the requirements. During the chat a few questions are asked, the ID card must be held visibly in front of the camera and you are allowed to wave a few times. After a few minutes, the chat will end and you wait on your smartphone for the result of the video identification.

Deposit money at Trade Republic

If this was completed positively, “Trade Republic” would like to know something about experience and knowledge in trading with shares and derivatives. In the end, the client confirms receipt of various information sheets, in particular the client agreement, approval of the escrow account, and the list of prices and services. After the confirmation, it is done and you receive your personal IBAN, and instructions on what to indicate when transferring money.

It should be noted that “Trade Republic” expects money transfers exclusively from a German bank account. Credit card, Paypal or other payment methods like Neteller are not possible.

My transfer was made right after the opening of the deposit. The crediting of the transfer to my “Trade Republic” account was already displayed in the personal area of the app on the same day after only about three hours. That was fast and I could start trading in principle. All in all, the opening including the capitalization of the account took less than four hours.

The surface of the Trade Republic – App

In the meantime, you can quickly familiarize yourself with the spartanly designed interface. “Trade Republic” reduces the menu to only three main pages, which can be accessed via the three icons at the bottom of the screen. On the right is the symbol for the “Profile”. Here you can view

  • your personal data via the small cogwheel
  • change your app PIN if necessary or desired
  • see the capital available for trading
  • withdraw money again.

The rest of the screen is filled with a timeline that chronically lists all relevant transactions such as deposits, withdrawals, purchases and sales.

Trading interface of the Trade Republic app

In the middle is the magnifying glass that leads to the search for securities. If you enter the name of a share, it’s stock exchange abbreviation or a WKN, the “Trade Republic” app shows suggestions for input in real-time. If you select the value you are looking for, you will be taken to a profile page of the share or certificate. There you can trade the value directly by selecting ‘Buy’. In the upper right corner, you can also just add the value to the watchlist with the small flag. Tap on the three vertical dots next to it shows possible options for the value. Here you can either add price alerts or display derivatives.

A tap on the back button of the smartphone takes you back to the search mask.

The left line symbol at the bottom of the screen takes you to the overview of your own investments, the portfolio value development, and the watch list below. If you select a value, you can return to its profile page with the ‘Buy’ button. The profile page initially offers price-related key figures. Below this, there is information about the company and a news timeline. The information should be used with caution, if relevant for the user. The texts are probably taken from Wikipedia and may not always be complete.

For example, the text on Infineon states that the company would have achieved a turnover of an incredible 6822 billion Dollars in 2015. However, there is a comma after the 6, as it was only 6.822 billion Dollars.

Trading with the Trade Republic – App

The trading of shares and derivatives is in principle as simple as the whole structure of the app. Whether directly from the search or the watchlist, you can buy and sell stocks with just three taps. Once you have selected a value that you want to include in your portfolio, simply tap ‘Buy’. In the following input mask, enter the number of shares or certificates and then tap on the arrow in the blue circle. The order overview that appears summarizes the details of the order again and a tab on ‘Buy now’ places the order in the order book at LS Exchange. The order is usually executed immediately and is displayed in the profile of the “Trade Republic” app.

This applies at least to pure market orders. If you want to place a limit order in the market, tap on the blue marked line “Market price” in the input mask. In the following dialog, the limit price order can be selected. If you decide to do so, enter the limit purchase price on the next page, which should of course be below the current price, and determine the length of validity of the order. If you have mistakenly entered a price that is higher than the current price, a message will appear indicating that the order is likely to be executed immediately. Nothing more.

Limit order in the Trade Republic app

A real shortcoming, however, is the lack of a stop-loss order when trading stocks. It is currently not possible with “Trade Republic” to hedge open or profit positions in shares with a stop loss. According to Christian Hecker, however, “Trade Republic” would like to “offer this option in the future”. It is not known when this will happen. Stop orders are currently only available for derivatives.

Derivative stop orders:Available
Stocks stop orders:Not available

Management of open positions

To close an open position or make a partial sell, first tap on the line symbol positioned below in the “Trade Republic” app. The existing investments are listed there. Tap on the underlying asset leads to a detailed view with a ‘Sell’ and a ‘Buy’ button. Here you can either increase the position or sell it in parts or as a whole, following the same procedure as above.

If a limit price is specified when selling, this time it must of course be above the current price. If the entered price is below the current price, the warning message will again appear that the order will probably be executed immediately.

How can Trade Republic survive on prices?

In many places, the question arises about how “Trade Republic” can even work with this price structure. But once you have immersed yourself in the subject matter, you will quickly understand. The trading app programmed by “Trade Republic” itself has structured as simply as the website. Licenses for other trading platforms are therefore no longer required, and the costs for the IT infrastructure are drastically reduced.

The clear price list also shows that the services are limited to the most necessary. This saves administrative and personnel costs. Trade Republic” also claims that

  • the high degree of digitalization
  • automation in securities transactions
  • the choice of the right partners

can minimize costs to a fraction.

That’s where the profits in Trade Republic come from. “Trade Republic” earns by refunding the cost of forwarding orders. However, the basis of the revenue structure is likely to be the rebates that Trade Republic receives for each order forwarding. According to the customer agreement, which can also be opened subsequently via the profile, this is “up to 3.50 Dollars” per order. These rebates are sometimes controversial because of fears that the orders will not be executed at the trading venue with the best price, but where the rebate is highest.

However, Christian Hecker rejects this problem and possible conflicts of interest, as the prices of the LS Exchange during Xetra trading hours are linked to its price position as the reference market. This is also constantly monitored by the Hamburg Stock Exchange. According to this, customers have no disadvantages whatsoever when executing orders in the “Trade Republic” app. The spread also always follows the Xetra reference market from 09:00 to 5:30. According to the customer agreement, only the off-exchange spreads and the prices in over-the-counter (OTC) trading are subject to the requirements of the respective trading partner or issuer.

Other important aspects of Trade Republic

In the customer agreement of “Trade Republic”, it can be read that the deposit protection for funds not in open positions is a maximum of 23,545 Dollars. This corresponds to the standard in Germany. However, Trade Republic also points out here that “as a result, the customer bears the insolvency risk of the Solaris (bank) holding the escrow account” if Trade Republic is unable to pay out the customer’s funds to either the Solaris deposit protection scheme or the insolvency administrator.

Transfer of securities account is not possible with Trade Republic

Depot transfers are not possible with “Trade Republic”. According to its terms and conditions, only the storage of securities that have also been ordered via “Trade Republic” is currently permitted. However, according to an article in “Wirtschaftswoche”, the broker has stated that securities account transfers should be possible in the course of this year, provided the value to be transferred is tradable in the “Trade Republic” app. The lending of customer-owned securities portfolios excludes “Trade Republic”.

Domestic sharesForeign shares
Free dividend withdrawalNo fees on dividend withdrawal

For the dividend withdrawal, the broker has eliminated the fees existing at the beginning. This is therefore free for both domestic and foreign shares.

Exemption orders can be issued in the profile under “Tax data”. To do this, you only need to enter the tax ID additionally. So far, it is only possible to enter the simple exemption amount of 943 Dollars. Married persons wishing to claim the full amount of 1,886 Dollars must be patient. According to “Trade Republic” is working on changing this.

The support at Trade Republic

Anyone who has problems with trading, the app or account management will find quick contact with the support team in the trading app. Direct chat can be activated in the profile under “Settings” and “Service”. A mail is also indicated there, who likes it better.

However, if the smartphone is seriously damaged or lost due to theft or misplacement, the only solution is to go back to the website. There, the imprint contains both the e-mail address and a telephone number. The latter should always be kept with you without having it stored on your smartphone.

Support available:24/7
Telephone:+49 30 5490 6310
Address:service@traderepublic.com
Languages:1+ languages

For general problems or questions we recommend the Facebook page of “Trade Republic”. A look at the timeline usually answers many questions in advance.

General thoughts on trading with Trade Republic

Is “Trade Republic” now the revolution for trading in shares and derivatives? To put it in legal terms: yes and no.

Yes, because the idea of trading on the financial markets for only 1.20 Dollars and only on the smartphone is completely new, at least for example in Germany. Even if the immediate competitor “justtrade.com”, which actually started developing and promoting the idea before “Trade Republic”, is still in the starting blocks.

Yes, because the trading app is really innovative, simple and well thought-out. All requirements for a broker are fulfilled. Trade Republic” offers everything you need for trading, from the Xetra-linked price quotation to the rather low stock and derivatives offering, to reliable order execution and documentation.

Compared to “normal” brokers, opening a securities account is really impressively fast and largely uncomplicated, even for mobile phone noobs like me. The quickly installed trading app is clear and understandable, underlying assets are easy to find and trade. Even the inexperienced beginner should be able to find his way around quickly and without any problems, even if he didn’t know the difference between a market order and a limit order before opening a securities account.

A dark side of Trade Republic

But there is also another perspective. Because it is not for nothing that “Trade Republic”, unlike other brokers, does not mention the phrase “professional trading” either on the website, in the app or anywhere else. Because it definitely is not and certainly does not want to be.

The presentation of the small and greatly abbreviated line charts in the trading app can only be seen as small theme-related cosmetics. For an analysis of the underlying with a view to an investment, they are absolutely worthless from the very beginning. And here lies the problem. How does an inexperienced beginner assess whether buying a stock might be worthwhile? In any case, additional sources are always necessary. These can be financial websites, where both fundamental data and charts can be read in. But even these must first be found and know how to use them.

This is especially true for trading in derivative certificates, which, as is well known, requires a certain amount of knowledge and experience. Anyone who does not know what he is doing here quickly ends up on the gambler’s battlefield with a dead account. In this respect, “Trade Republic” with its very general presentation and construction arouses the suspicion that it is primarily aimed at the young and still inexperienced generation as a target group.

Of course, the shrewd trader can also take advantage of the low trading costs with a rather wide range of tradable assets without having to forego his actual sources of information and analysis. But then he has to deal with aspects such as the missing stop-loss order, the missing trailing stop, or the missing sell-limit order (take profit). Not to mention the fact that prudent trade management can only work with a manual transfer of orders on “Trade Republic” into a real analysis chart.

Conclusion

“Trade Republic” is a successful startup that is basically easy to use. As a beginner, however, you should not concentrate solely on the trading app, but look far beyond the horizon and search intensively for further information before making any investment decision. Experienced traders can use the app to reduce their trading costs above all. However, they may have to accept a somewhat more complicated way of working. Those who are willing to do so will certainly enjoy the low-cost trading on “Trade Republic”.


Most asked questions

Is Trade Republic a regulated broker?

Yes. As a German broker, the company is subject to the strict guidelines of the BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht) in Frankfurt.

What is special about this online broker?

Trade Republic only offers trading via its own App. You cannot use any trading services on the website, although it is necessary to register to gain access to the App.

Is Trade republic a good option for beginners?

To be honest, this online broker does not seem like a very smart choice for inexperienced traders since there is no additional educational material that can help you find your way around the stock exchange.

How easily can I open a depot here?

It is very simple to open a securities account if you have your residency in Germany, your telephone number is registered in Europe and your smartphone operating system supports the App. After a video verification you can start to trade. The average time to open a deposit with Trade Republic is 5 to 10 minutes.

One Response

  1. Andre Witzel September 13, 2020

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