How to buy Ark Invest ETF? Let’s start with the kicker; when Robinhood’s European launch crashed and burned, all chances of you directly buying into an Ark Invest ETF went up in flames. Like it or not, the vast majority of Europeans will run headfirst into the 2018 EU law that prohibits the purchase of many securities. Among the blocked securities are most ETFs (including wall street darling Ark Invest). So unless you have heavy ties to the US or qualify as a sophisticated investor, it is near-impossible for you to own an Ark Invest ETF. All due to a few key differences between EU and American finance market laws.
But the financial industry is defined by workarounds. So today, we’ll be showing you exactly how you can leverage CFDs to profit from Ark Invest’s red-hot track record.
Here’s your definitive guide on How to buy Ark Invest ETFs;
Your Solution? The CFD Method:
To the best of our knowledge, CFDs are the only consistent way for a European to gain exposure to most American ETFs reliably. CFD’s (Contracts for Difference) are financial derivatives that will allow you to gain exposure to your chosen underlying asset (in this case, Ark Invest).
As the underlying security – any increase in value to Ark Invest’s ETF will increase the value of your CFD holdings proportionally. The big upside to a CFD is that you can trade on the value of the underlying security without ever owning it. (making it perfect for European’s who can’t directly buy an ETF).
Advantage of CFDs:
But better still is that most CFDs offer leverage that will allow you to gain greater exposure to your chosen asset at much lower costs.
- Therefore, your CFD will allow you to operate at a margin so that you can make far more money with lower up-front capital investment.
- This means your investment can be multiplicative. Just $5,000 into a CFD could allow you to gain a 10,000$ worth position on shares/indexes (or more)—thereby allowing you to receive exponentially higher returns (or losses).
- Furthermore, CFDs pay the price difference on an underlying asset between the time of purchase and the time of sale. Therefore they are perfect if you can confidently predict which direction the underlying asset will go.
Disadvantages of CFDs:
And now for the bad news….
- Unfortunately for most investors, accurately predicting the direction of most investments is a pipe-dream. (However, given Ark Invest’s stellar track record, CFDs stand as the perfect way – and for most Europeans the only way – to invest in Ark Invest.)
- The final kicker – and perhaps the biggest drawback of all – is that you’ll still need a Broker to set up and arrange your position.
Workarounds to the disadvantages:
However, in our humble opinion, IG has made the Brokerage process less painful than almost anybody else.
Forget the hassle of having to deal with a Broker over the phone (or worse, in person)
With IG, you can set up an account online in minutes, easily deposit or withdraw funds, set a position, purchase a range of securities or derivatives, and make use of their extensive guide list as you navigate your way to investor riches.
For that reason, when it comes to our guide on ‘How to buy Ark Invest ETF’, we’ll be giving IG an A+.
And the FCA seems to agree: IG is listed on the London stock exchange; regulated by several highly esteemed financial regulation bodies (such as the UK's Financial Conduct Authority ‘FCA’ and Germany's Federal Financial Supervisory Authority ‘BaFin’); and is required to disclose its financial reporting for auditing due to publicly traded status. As a result, IG is generally seen as a very safe bet.
Unlike other Brokerage apps, IG typically doesn’t take positions against its investors. Which makes them a lot more reliable when it comes to you getting a fair shot at earning some serious cash…
And with Ark Invest, consistent returns might just be the start.
But you still have to play it smart; here’s the variables you need to control:
Short term vs Long term profits:
CFDs are typically short-term options, and it’s unusual (and in some cases impossible) for CFDs to be held for more than 90 days. However, with the margins that CFDs offer and the solid track record of Ark Invest, there probably won’t be anything stopping you from taking increasingly greater positions on Ark Invest by immediately re-buying a larger stake on their securities each time you sell off your CFDs.
Managing your leverage into Ark Invest ETF:
For buying and selling, debit cards, credit cards, PayPal, and bank transfers can be easily used to accomplish either. As of September 3rd 2020, ARKK ETF is currently trading at 96.97$ a share. (Up 124% in the 12 months since its Sep 2019 43$ share price). Given IG’s 25% margin on 10,000 > shares, it will be possible for you to buy a derivative position on a little over 200 ARKK ETF shares (a value of 20,000$) for only 5,000$ of upfront capital.
However, given that the stock market is continually fluctuating, a good idea might be to play things safer and give yourself more equity leeway so that you do not get hit by a margin call.
Similarly, Stop Distance can be valuable if you’re looking to invest in an Ark Invest CFD but want to play things on the safe side. Stop distance (or stop-losses) will ensure that if by some freak chance things go wrong, you can’t lose too much money. By placing a stop distance on your CFD, if the underlying Ark Invest security falls below a certain price, you will be able to minimize your losses by automatically selling your position. That way, if by some stroke of terrible luck things go south overnight, you could cap the losses of your CFDs value so that instead of dropping all the way, you get out at a predetermined point. (Usually, the minimum is at a 20% loss to the underlying security).
Drawbacks of safety-nets:
However, Stop Distance comes with the caveat that it cannot make allowances for market volatility. So if you had a stop distance of 20%, and ARKK fell to 40$ a share in a day, your stop distance would cap the devaluing of your CFD at 20% less than your 96.97$ buy-in. For example, instead of losing the difference between 96.97$ and 40$, you’ll only be able to lose between 96.97$ and 77.57$.
However, if Ark Invest were to skyrocket in price to 200$ a share the very next day, you would not be able to profit from this as you would already be out. So while Stop distance can function as a safety net, they can also be a cause for significant losses. One split split-second dip in the stock market is all it would take to ruin your investment completely. Worse still, they can keep you away from the major gains that may follow an initial dip.
That's it! Your very own ‘How to buy Ark Invest ETF’ guide!
Whether you choose to use PayPal, credit cards, debit cards or bank transfers; choose to operate close to your margins or at a safe distance from them; or decide to opt-in for a risk-aversion stop distance or play it by eye, you now know the ins and outs of how to buy ARK Invest ETF. And here’s our link to IG – IG.com – where you can easily manage your investment into this hotly contested opportunity. All it takes is a few clicks of a button!