Analyze stock trading and investment app terms for payment for order flow, margin call rights, securities lending, fractional share ownership, and outage liability.
Built by Sergei Tokmakov, California-licensed attorney.
Commission-free trading apps have hidden costs and risks in their terms. These provisions affect your trade execution, ownership rights, and liability exposure.
"Free" trading is funded by selling your order flow to market makers. This can result in worse execution prices—the hidden cost that replaces commissions.
Brokers can liquidate your positions without notice to meet margin calls. You may have no opportunity to deposit funds before your shares are sold at unfavorable prices.
Fractional shares may not be true securities ownership. They might be contractual claims, lacking voting rights, dividend timing differences, or transfer restrictions.
Your shares may be lent to short sellers. While you "own" the stock, the broker profits from lending it. You may lose voting rights during the lending period.
Platform outages during volatile markets are disclaimed. If you can't trade during a crash because the app is down, the broker isn't liable for your losses.
Uninvested cash is "swept" to partner banks for FDIC coverage. But if you have other accounts at those banks, your total coverage may be less than advertised.
Common terms in trading app agreements affecting investors.
Disputes through securities arbitration.
Cannot join group lawsuits.
Available order types and limitations.
T+1 or T+2 settlement periods.
Deposit and withdrawal timing.
Securities investor protection limits.
Pattern day trader restrictions.
SEC and FINRA required disclosures.
Paste service terms below to identify potentially problematic clauses.
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