Hey! This article will give you our honest review of a recent online broker: BUX Zero, a trading app that belongs to the Dutch fintech startup BUX B.V.
BUX Zero is a mobile-only, commission-free stock and ETF trading app with 100k+ users. Currently, it is only available for investors from the Netherlands, France, Germany, Belgium, and Austria.
That’s BUX Zero in a nutshell. If you want to find out what our research team has to say after carefully analyzing BUX Zero, keep on reading our BUX Zero Review. Here’s what we’ll cover:
Launched in 2019, the BUX Zero app has positioned itself as an affordable way for Europeans to increase their savings. It brings a simple and elegant way to start investing.
The coronavirus pandemic brought many young investors to the stock market who do not want clutter and confusion. BUX Zero saw that as a bigger opportunity to increase its client´s base.
Moreover, BUX Zero did not experience any system failures during this period, a strong confirmation that its backend broker (ABN AMRO Clearing Bank N.V.) has paid off. Robinhood´s clients had a different experience (read here).
At the moment, BUX Zero remains only as a mobile app which means that everything from account opening to your investment activity is made 100% through your mobile device.
If you already know where you want to allocate your hardworking cash, the app might be a good alternative for you because, by just giving you some variety of financial products with minimalistic app features, it means less additional costs for your wallet.
BUX Zero provides “the investment service of reception and transmission of Client Orders”. What does it mean? Well, it means that it only acts as an intermediary between you and the party you are buying/selling from the financial instruments (stocks and ETFs), with no complex in-house features which allow keeping its cost low!
Despite having a contact support team, it provides neither investment nor tax advice.
If you do not have the time to read the “Client Agreement” document, let us mention a crucial point you should be aware of, but, unfortunately, few investors pay attention to it.
Using the BUX app, you give your consent to lend the financial instruments held in your account (for short-selling, for instance). While lending your shares allows BUX Zero to significantly reduce costs and have a low commission structure, this also implies an additional small (yet existent) risk for investors.
To mitigate it, BUX will procure to hold collateral to at least the value of the lent’s financial instruments.
2. Pros and Cons
- Commission-free stock and ETF trading
- Modern and user-friendly mobile app
- No inactivity, custody, deposit or withdraw fee
- No minimum required deposit
- No investment advice
- No demo account
- Limited financial products
- Only available in 5 countries
3. Products and Markets
In terms of the variety of products and markets to choose from, the investment options available are still limited. It just offers US stocks and EU stocks (Dutch, German, Belgian, French, and Austrian stocks) and only 25+ ETFs to trade.
4. Fees Snapshot
When it comes to fees, BUX Zero is very transparent. First of all, it charges no commission for Zero Orders (stocks or ETFs).
For market and limit orders, it only charges 1€ for EU stocks and ETFs but no commissions for US stocks.
“How does a Zero Order work?” you may be wondering. In simple terms, a Zero Order allows BUX Zero to collect all of the users’ orders for the day and send them to the stock market at the end of the trading day, between 4 and 5 p.m. (CET). However, keep in mind that the price executed might not be the one you were expecting.
For that reason, BUX Zero has built a safety measure to avoid overpay or undersell. That is, BUX Zero will automatically cancel a buy order if the difference between the market price at the end of the day is higher than 4 per cent than in the moment you placed the order. For a sell order, the difference in pricing may not be higher than 5 per cent.
Last but not least, the BUX trading app also earns money through FX markup when you want to buy US stocks. As you know, such stocks are quoted in dollars, so you need to convert some of your euros to buy them and the other way around when selling them. For this service, BUX Zero applies a fee of 0.25% to the EUR/USD FX spot rate. Example: If 1€ is worth 1.10$ in the market, you will only receive 1.09725$.
Like any other broker, it charges a spread cost indirectly implicit in the price you buy/sell any security (detailed explanation in the comment section!)
5. Safety and Regulation
In terms of safety, BUX B.V. is authorized and regulated by the Dutch Authority for Financial Markets (Autoriteit Financiële Markten – AFM).
As such, their clients benefit from the Deposit Guarantee Scheme (DGS) that assures their money up to €100,000 in the event of the bankruptcy of ABN AMRO Clearing Bank N.V. and the Investor Compensation Scheme (ICS) compensates your investments (assets) up to an amount of €20,000 if BUX B.V. goes bankrupt.
However, it is just a legal requirement because, in practice, it should not “matter” since your cash (temporary money for settlement purposes) and assets are held in a “Stitching” (a foundation under Dutch law) called BUX Custody which has the sole purpose of holding Financial Instruments and money for Clients.
To make it clear:
- The money that appears in your account balance is in ABN Clearing Bank
- The assets are held in BUX Custody
Do you want to read a deeper analysis? Check out our dedicated article on investment protection (for EU investors)!
6. Countries Accepted
BUX Zero is available in 5 European countries offering only EUR based accounts. Their services are available in the following countries: Netherlands, France, Germany, Belgium, and Austria.
Did we answer all your doubts through our BUX Review? Did it help you make your decision regarding opening an account in BUX Zero? Let us know your feedback!