Fractional Share Trading Is Coming In December

We’re excited to share some fantastic news with you! Starting this December, we’re rolling out Fractional Share Trading. Our dedication has always been to financial empowerment and making investing more user-friendly for everyone.

With Fractional Share Trading, the financial world becomes even more inclusive. Now, with just $5, you have the power to invest. Whether you’re just starting out or looking to diversify, this feature promises simplicity and flexibility. And the best part? It integrates seamlessly with our suite of services, notably the automatic dividend reinvestment.

A word from our CEO, John Liu: “This move isn’t just about offering more investment choices; it’s about making the market more accessible. Investors now have the opportunity to tap into prominent companies like Nvidia (NVDA) and Meta Platforms (META), which might have been previously out of reach due to their high per-share prices.”

Stay tuned for the launch on our web platform in December. And for our mobile-savvy members, an update will follow shortly, ensuring a seamless experience across all devices.

Thank you for trusting Firstrade. We’re thrilled about the journey ahead and are glad to have you with us.

Top 25 Most Traded Stocks & ETFs by Investors at Firstrade in September

Here’s the full list of top favored stocks and ETFs among Firstrade investors in the last month:

1. Tesla Inc. (TSLA)

2. NVIDIA Corp (NVDA)

3. Apple Inc. (AAPL)

4. ProShares UltraPro QQQ  (TQQQ)

5. ProShares UltraPro Short QQQ ETF (SQQQ)

6. Direxion Daily Semiconductor Bull 3X Shares (SOXL)

7. Arm Holdings PLC - ADR (ARM)

8. Taiwan Semiconductor Mfg. Co. Ltd. (TSM)

9. Advanced Micro Devices, Inc. (AMD)

10. iShares 20 Plus Year Treasury Bond ETF (TLT)

11. Direxion Daily Semiconductor Bear 3X Shares (SOXS)

12. Vanguard 500 Index Fund ETF (VOO)

13. Invesco QQQ Trust Series 1 (QQQ)

14. Amazon.com, Inc. (AMZN)

15. Microsoft Corp (MSFT)

16. Walt Disney Co (DIS)

17. Vanguard Total Stock Market Index Fund ETF (VTI)

18. Palantir Technologies Inc (PLTR)

19. Unity Software Inc (U)

20. Intel Corporation (INTC)

21. Direxion Daily 20+ Year Treasury Bull 3X Shares ETF (TMF)

22. Coca-Cola Co (KO)

23. ProShares Ultra VIX Short Term Futures ETF (UVXY)

24. Vanguard Total World Stock Index Fund ETF (VT)

25. Meta Platforms Inc (META)

NASDAQ vs NYSE: What's the Difference?

What is the NASDAQ vs. NYSE? Discover their historical backgrounds, trading mechanisms, listed companies, trading volume, market capitalization, and public perception.

When investors think of the stock market, two major players often come to mind: NASDAQ (National Association of Securities Dealers Automated Quotations) and NYSE (New York Stock Exchange). These leading American stock exchanges play significant roles in the global financial market. Recognizing what is the NASDAQ vs. NYSE difference can help investors gain insights into how businesses operate within these markets and make more informed decisions when trading stocks, shaping their investment strategies accordingly.

Historical Background

The NYSE's roots trace back to 1792 when 24 stockbrokers signed the Buttonwood Agreement under a buttonwood tree, birthing this iconic institution. Today, it houses trades for around 2,800 companies, ranging from blue-chip to high-growth entities, with a daily trading volume of about 1.46 billion shares.

In contrast, NASDAQ, founded in 1971, made history as the world's first electronic stock market. With over 3,300 listed companies, it distinguishes itself with its technological savviness and facilitates around 1.8 billion trades daily.

Nature of the Markets

Trading on the NYSE: The Role of Specialists and Brokers
Trading on the New York Stock Exchange operates in an auction format, which involves a dynamic interaction of buyers and sellers. This mechanism is orchestrated by two critical players on the NYSE floor: specialists and brokers.

Brokers represent the interests of an investment firm or its clients. They bring the buy and sell orders from investors to the floor of the NYSE. These orders are then handed over to specialists, who manage specific stocks.

Specialists have a unique role. Stationed in one location on the floor, they manage one or several specific stocks, depending on the volume of trades. Their task is to accept buy and sell orders from brokers and facilitate the actual auction. They ensure there's always a market for their specified stocks, even investing their firm's capital if necessary to maintain the market's activity and the shares' liquidity.

The Dealer Market System of NASDAQ
On the other side, the NASDAQ functions differently as it operates as a dealer market. This market structure is characterized by its automated electronic nature, eliminating the need for a physical trading floor.

In the NASDAQ's dealer market, transactions are carried out through market makers. These market makers are responsible for maintaining a specific inventory of a particular stock. They stand ready to buy or sell these stocks at publicly quoted prices, ensuring a degree of liquidity in the market.

Unlike the NYSE, where brokers interact with specialists, brokers on the NASDAQ buy and sell stocks directly through these market makers. This system allows for trades to be executed in a swift and seamless manner, reflecting the high-tech reputation of the NASDAQ.

On the other hand, NASDAQ functions as a dealers' market. It employs an electronic system where brokers interact with market makers rather than each other. These market makers hold a certain number of stocks, enabling swift, direct transactions with brokers. For those interested in ETF trading, NASDAQ offers some of the more popular ETFs in the tech sector.

Trading Volume and Market Capitalization

The question of what is the NASDAQ vs. NYSE difference extends to trading volume and market capitalization. Despite NASDAQ facilitating more daily trades, NYSE surpasses it in market capitalization, attesting to the economic size of the NYSE-listed companies.

Type of Listed Companies
NYSE has a reputation for housing strong, high-quality securities, including blue-chip companies. Its stringent listing requirements help uphold this status.

NASDAQ is often associated with high-tech, high-growth, and volatile stocks, with many newer businesses choosing it for listing. Some of the world's biggest companies also call NASDAQ home.

Trading Systems

Another point of distinction lies in the trading systems. NYSE uses a hybrid model, employing both human interaction and technology. It still maintains a physical trading floor, but most exchanges take place electronically at its data center in New Jersey.

Conversely, NASDAQ, an entirely electronic exchange, needs no physical floor. Trading happens through automated computer networks, underscoring its reputation as a high-tech exchange.

Public Perception and Listing Costs

When considering what is the NASDAQ vs. NYSE difference in terms of public perception, NYSE is generally seen as the safer bet due to its established, blue-chip companies. NASDAQ, with its high-growth tech stocks, tends to be seen as more volatile.

Listing costs also differ significantly. It is often 70% to 80% cheaper for a company to list its stock on NASDAQ than on the NYSE, making it an attractive option for newer, smaller businesses.

Ownership Structure

Historically, the NYSE operated as a privately traded corporation for nearly 214 years until it went public in 2006. The NASDAQ, on the other hand, was a publicly traded corporation from the start. Today, both exchanges operate as publicly traded corporations, with shares available for purchase on their respective exchanges. They both comply with the Securities and Exchange Commission's standard filing requirements.

What is the NASDAQ vs. NYSE?

In essence, the NYSE and NASDAQ, while similar in their core purpose, differ in their operation, listed companies, and trading mechanisms. Understanding the distinctions - what is the NASDAQ vs. NYSE difference - is key for investors in choosing suitable stocks and creating effective investment strategies.

Whether you lean towards the blue-chip stability of the NYSE or the high-tech growth potential on the NASDAQ, understanding these differences is an integral part of your investment journey. But having the right trading platform can make the difference between a good and a great investing experience. Firstrade offers a comprehensive suite of investment products, including Stocks/ETFs, Options, and over 11,000 Mutual Funds, all with $0 commission on trades and $0 contract fees on options. Investors can also explore various Fixed Income products on the platform.

How Often Are Dividends Paid On Stocks?

Gain insights into the typical frequency of dividend stock disbursement, with most companies adhering to a quarterly distribution schedule.

Dividends represent a portion of a company’s profits distributed to shareholders, thereby playing a critical role in stock investment by providing an additional income stream.

How often do dividend stocks pay? Typically, dividend payments are made quarterly, but the frequency can vary depending on the company’s policies.

What are dividends?

Dividends serve as a means to distribute profits, allowing a corporation to pay a portion of its earnings to its stakeholders or investors that trade stocks. The decision of whether to allocate dividends and the specific amount falls under the authority of the company's board of directors. The board possesses the authority to either reinvest profits into the company to foster expansion or allocate them to shareholders as dividends. Striking a balance between these two options is also a possibility.

Not all companies pay dividends. Growth companies, for instance, often prefer to reinvest all their profits to accelerate expansion, while some tech companies have historically shied away from dividend payments, focusing on reinvestment strategies instead. Note, if you trade options, they do not pay dividends.

How often do dividend stocks pay?

Dividends are typically disbursed on a regular basis, aligning with the company's financial reporting cycles, which generally occur every three months. However, there may be a few exceptions. Some companies, such as Realty Income, referred to as "the monthly dividend company," make monthly distributions. A few others might pay semi-annually or annually.

A “special dividend” is another exception. These are irregular and typically larger dividends that a company may pay after a particularly profitable period or after a major event like an asset sale. Costco Wholesale is a notable example, having paid substantial special dividends multiple times in the past decade, alongside its regular quarterly dividends.

Key dates in the dividend payment process

Understanding dividend payments requires familiarity with four key dates:

• Declaration Date: The date when a company’s board of directors announces the next dividend payment.

• Ex-Dividend Date: The cutoff date to buy the company’s shares and still qualify for the upcoming dividend. If you buy on or after this date, you won't be able to receive the next dividend.

• Record Date: The date by which you must be on the company’s books as a shareholder to receive the dividend.

• Payment Date: The date when the dividends are paid to shareholders.

To illustrate, let's consider Apple’s dividend timeline from 2020. Apple declared a dividend of $0.82 per share on July 30, 2020. The payment date was set for August 13, for shareholders of record as of August 10. The ex-dividend date was August 7. So, in order to be eligible for this dividend, an investor had to buy or already own Apple shares before August 7.

How dividends are paid

Dividends form an integral part of the investment strategy for many, providing a steady stream of income and potential for further capital appreciation. Understanding the process of how these dividends are paid and your available options can empower your investment decisions.

Cash payment process

The most prevalent form of dividend payment is in cash. When a business announces a dividend, it establishes a designated payout for each share. For instance, if a company declares a dividend of $1 for every share, an individual who possesses 100 shares would be entitled to $100.

Once the payment date arrives, this cash dividend is transferred directly into your brokerage account. This transfer is usually seamless, with the brokerage handling all logistics. You do not need to take any specific action to receive this payment.

After being in your possession, the cash dividend is at your disposal for any purpose you choose. You have the freedom to withdraw it, utilize it for expenses, or reinvest it in the market, based on your unique investment objectives and financial requirements. Nonetheless, it is crucial to bear in mind that cash dividends generally incur taxes in the year they are received.

Dividend Reinvestment Plans (DRIPs) and their benefits

In addition to cash payments, some companies offer Dividend Reinvestment Plans, commonly known as DRIPs. These plans automatically reinvest your dividends back into additional shares or fractions of shares of the issuing company.

DRIPs offer several advantages for long-term investors. Firstly, they provide a convenient, automatic method to compound your investment, as reinvested dividends purchase more shares, which in turn generate their own dividends.

Secondly, many DRIPs allow the purchase of additional shares without brokerage fees, making them a cost-effective way to increase your holdings.

Lastly, some companies even offer their shares at a discounted price through their DRIPs, adding an extra incentive for participation.

However, just like cash dividends, reinvested dividends are typically subject to tax. It's also important to note that while DRIPs promote automatic investment, they may not be ideal for those who prefer cash dividends for regular income, or who wish to diversify their investments beyond the dividend-issuing company.

Bottom line

To recap, dividends offer a profitable way to earn from your investments, most commonly paid on a quarterly basis. However, how often dividend stocks pay can vary. Navigating the landscape of dividends involves understanding key dates in the dividend payment process, and how dividends are paid. They play a crucial role in shaping investment strategies and hence, require thoughtful consideration.

Whether you're an income-focused investor relying on dividends or a growth-oriented investor reinvesting dividends, it’s always recommended to do thorough research or consult with a financial advisor.

Firstrade offers an innovative trading platform that makes investing accessible and engaging. Enjoy $0 commission trades and $0 options contract fees. With Firstrade’s extended hours trading, you can react to market news outside the standard trading hours.

Open an account today!

Top 25 Most Traded Stocks & ETFs by Investors at Firstrade in August

Here’s the full list of top favored stocks and ETFs among Firstrade investors in the last month:

1. Tesla Inc. (TSLA)

2. NVIDIA Corporation (NVDA)

3. ProShares UltraPro QQQ (TQQQ)

4. ProShares UltraPro Short QQQ ETF  (SQQQ)

5. Apple Inc (AAPL)

6. Direxion Daily Semiconductor Bull 3X Shares (SOXL)

7.  Advanced Micro Devices, Inc. (AMD)

8. Palantir Technologies Inc (PLTR)

9. Taiwan Semiconductor Mfg. Co. Ltd. (TSM)

10. iShares 20 Plus Year Treasury Bond ETF (TLT)

11. Direxion Daily Semiconductor Bear 3X Shares (SOXS)

12. Invesco QQQ Trust Series 1 (QQQ)

13. Microsoft Corp (MSFT)

14. Amazon.com, Inc. (AMZN)

15. Vanguard 500 Index Fund ETF (VOO)

16. American Superconductor Corporation (AMSC)

17. Super Micro Computer Inc (SMCI)

18. Direxion Daily 20+ Year Treasury Bull 3X Shares ETF (TMF)

19. Unity Software Inc (U)

20. Walt Disney Co (DIS)

21. Upstart Holdings Inc (UPST)

22. Vanguard Total Stock Market Index Fund ETF (VTI)

23. ProShares Ultra VIX Short Term Futures ETF (UVXY)

24. Meta Platforms Inc (META)

25. Alphabet Inc Class A (GOOGL)