Read this article in German, French, Spanish, Italian or Polish.
When we asked our users what services they would like to see from Bitpanda, a lot of them asked for stocks investing products. So we developed a financial product that is new to the market and gives our users the same flexibility that they are used to from investing in digital assets on Bitpanda. That’s how Bitpanda Stocks and our 24/7 investing was born. But how does it actually work and how do we pull off around-the-clock fractional stock investing? Let’s explain.
Bitpanda Stocks is offering fractional stocks and ETF* investing. Technically speaking, Bitpanda Stocks is a unique kind of derivative, not comparable to conventional derivatives, CFDs or options on the market. You don’t acquire the stocks or ETF itself, but instead, a financial instrument that replicates the value of the underlying asset 1:1.
This means that you invest in the actual underlying stocks or ETFs through derivative contracts and Bitpanda holds 100% of the underlying stocks/ETFs. Each derivative contract is always worth as much as the respective stock or ETF.
Bitpanda buys real assets such as stocks and ETFs that are underlyings to Bitpanda Stocks at an external exchange and holds them at a custody bank. From there, Bitpanda issues fractional stocks in the form of derivative contracts to its users.
Since we’re issuing the contracts via Bitpanda Financial Services, Bitpanda’s official FMA-approved investment arm, it allows our users to invest 24/7, even outside of regular opening hours for traditional stock exchanges. That means that you can buy a fractional stock whenever you feel like it and you don’t have to wait until Monday morning for the exchange to open.
Bitpanda Stocks and dividends
Bitpanda Stocks offers real-time data for the stocks to keep you posted on current prices. The price data includes the current trading prices and volumes for the acquisition (“ask price”) and the termination (“bid price”) of the underlying. This means when a user acquires Bitpanda Stocks from Bitpanda, their acquisition is based on the “ask price” and when the user terminates their investment on Bitpanda, the return of the asset is based on the “bid price”. During trading hours, the current market price is used continuously. Outside of trading hours, Bitpanda uses the last available price at the close of trading and keeps it constant until trading resumes.
Bitpanda Stocks offers real-time data for the stocks to keep you posted on current prices. The price data includes the current trading prices and volumes for the acquisition (“ask price”) and the return (“bid price”) of the underlying. This means when a user acquires fractional stocks from Bitpanda, their acquisition is based on the “ask price” and when the user terminates their investment on Bitpanda, their return is based on the “bid price”. During trading hours, the current market price is used continuously. Outside of trading hours, Bitpanda uses the last available price at the close of trading and keeps it constant until trading resumes.
Acquiring and terminating Bitpanda Stocks is as easy as with all other digital assets available on Bitpanda. To make investing more accessible and efficient, we don’t only offer 24/7 orders: You can start investing with a minimum of €1 and we don’t charge any commissions. Instead, we earn money through the tight spreads. You can read more about how we make money with Bitpanda Stocks in this article.
To help you choose which fractional stocks to invest in, you can find detailed information and data about each company and ETF in our Bitpanda Stocks portfolio, helping you assess the risk level and investment opportunities.
By investing in Bitpanda Stocks, you are also eligible for dividend payouts proportionate to your holdings. If the company you invested in pays a dividend, its value will automatically be transferred to your Bitpanda account – note that each company’s general dividend terms and dates apply. From there, you can choose to keep it in your wallet or reinvest it.
Bitpanda offers state-of-the-art security to protect your account and keep your investments safe. Bitpanda Financial Services holds a MiFID II licence and is therefore a supervised investment firm which complies with the latest financial regulations, including the recently-introduced AML5. All your investments in Bitpanda Stocks are also protected by a pledge agreement which covers up to 100% of your claims.
Ready to invest? You can find the full portfolio of Bitpanda Stocks here.
*“Bitpanda Stocks” is a new product from Bitpanda and allows you to invest in fractional shares/ETFs. “Bitpanda Stocks” are not shares, but a contract that allows you to participate in the price movements of certain shares, including any dividend distributions. It is neither tradable on stock exchanges nor on other trading venues, but can be resold to Bitpanda at any time under the conditions set out in the General Terms and Conditions and the contract. Further details on this product, the issuer and the relevant risks are available in the prospectus at bitpanda.com.