Since 2006 DeGiro has grown from a small startup broker to a large broker active throughout Europe and starting in Asia. DeGiro is headquartered in The Netherlands (Amsterdam) but it also has offices in Bulgaria and Hong Kong.
The origin of DeGiro lies with another major Dutch broker, Binck. The current CEO, Gijs Nagel, quit Binck in 2006 with 4 other Binck associates and they formed their own broker house under the name of DeGiro.
DeGiro’s focus on keeping costs down
Efficiency and smart online servicing are the name of the game at DeGiro. The result is very low broker fees and an online trading platform that offers you all the things you need as an investor or trader.
Compared to other brokers DeGiro is absolutely much cheaper than anyone else. So if you are more of a trader than an investor DeGiro would be just the broker you are looking for.
What about risks at DeGiro?
The main question here is whether your money is save with DeGiro. One thing to take notice of is that DeGiro is not a bank. Some brokers have a banking license which covers the amount of cash you have in their accounts (up to € 100.000,- in many European countries).
So with DeGiro you run the theoretical risk of losing your money in the broker’s account. In some countries however this money is also secure for amounts up to € 20.000,-.
Important to notice is that the money you have invested in equity or other direct investments are safe as these investments are out of reach of the broker’s contents in case of a failure. All in all the risk is very low.
DeGiro is still in its growing phase which accounts for some growth losses. In 2016 however they saw their transactions rise with 66% and they also became profitable.
When is DeGiro the right broker for you?
The answer is simple: When you trade in high volumes or in large order amounts DeGiro will offer you the best possible broker’s fees. Compared to other brokers DeGiro is up to 10 times cheaper than the market average.
So we are not talking about small differences. It really amounts to significant savings in broker costs. There are risks when you hold large amounts in cash on your broker’s account but otherwise the risk is manageable.
Lending of shares at DeGiro
Depending on the broker you are trading with they may lend your shares to short sellers. At DeGiro this lending option is open which implies that the shares you are holding through DeGiro may be lend out to a short seller that borrows your shares without your knowledge and without gaining something in return.
For DeGiro this is one of the profit makers. But I must add that this is common practice as many brokers do this (but not all). However, DeGiro offers Custody accounts to customers who do not want their shares to be lend out. It comes at a small price but then you are not vulnerable of the risk the short seller is running.
Would I become a DeGiro customer?
Oh yes, for sure! I love the extreme low fees they incur and I must admit that things work out very smoothly at De Giro. In the first years of their existence I have run into some small problems but in the last couple of years the online platform runs smoothly.
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