If you read my previous article about some of the best features of Tiger Brokers and moomoo that were rarely mentioned online and found it useful, you probably registered and funded your Tiger Brokers account to enjoy the promotion and rewards.
For readers who are just here to check out the free shares and benefits that you'll get for opening an account with Tiger Brokers, click here to skip ahead.
In this article, I'll share with you how I maximised the value of Tiger Brokers' stock vouchers to purchase a dividend stock, supercharging its dividend yield to 19%!
This article is great for readers who are building a dividend investment portfolio. But for those who simply want to turn their Tiger Brokers stock vouchers into cash, I'll have something for you at the end of the article too.
What are Tiger Brokers' stock vouchers and how do they work?
Stock vouchers can be treated as cash rebates for completing a buy order.
To simply put once you make a stock purchase and have paid for that transaction, Tiger Brokers will rebate the dollar value of the stock voucher back into your Tiger account.
Here are some important points to take note of:
- Unclaimed vouchers will expire within 20 days after issuance and the validity period agter receipt is 30 days. Don't procrastinate and take action.
- How a stock voucher works is in the form of rebate. You need to have sufficient funds to pay for the entire trade first and the rebate amount will be made to your Tiger account within 5 working days.
- Each voucher can only be linked to one trade order and will automatically be linked to the first trading order. If you have 2 or more vouchers, after one of them is used, the second voucher will automatically take effect within one hour.
- Make sure your stock purchase is greater than or equal to the value of the stock voucher in order to qualify for the full rebate of the voucher amount. Otherwise, the rebate amount will only be the value of your stock purchase.
- The stock that you purchase must be within the trading market options. My current stock voucher allows me receive a cash rebate for trading U.S. stocks, Hong Kong stocks, Singapore stocks, Futures, U.S. stock options, Hong Kong stock options, CBBCs, Hong Kong warrants and Australian stocks.
- While the account currency of the stock voucher is in SGD, you will receive the cash rebate in the same currency as your stock purchase. That means if you purchased U.S. stocks in US dollars, your stock voucher's cash rebate will be performed in US dollars.
How do you get your hands on some Tiger Brokers stock voucher?
Tiger Brokers have 2 business objectives. First is to acquire more new customers and second is encourage customers to perform more trades on their platform.
By referring your friends to set up a Tiger Brokers account and make an initial deposit, you can earn stock vouchers worth up to $100.
Invite a friend to open a Tiger Brokers account
Referee makes an initial deposit of $2,000
Referee makes an initial deposit of $5,000
Referee makes an initial deposit of $10,000
Referee makes an initial deposit of $30,000
Not into the referral game? No problem!
Tiger Brokers also rewards their customers who are frequent traders. There are different tiers, Silver Trader, Gold Trader and Ace Trader and you can refer to the table below to see the different privileges that each tier is entitled to.
As I only invest for the long term and don't make many trades each month, I doubt I would even be able to qualify for Silver Trader.
How to maximise value from Tiger Brokers' stock vouchers
If the goal was to exchange the stock voucher for cash, I would stick to making trades in Singapore dollars as the cash rebate of the stock voucher will be made in the same currency as your stock purchase. This is to avoid any loss due to currency fluctations.
For those who want to qualify for the cash rebate for the least amount of capital needed, I would suggest going for Singapore stocks that are priced at under $1. That way, you will not need more than $100 to fund the trade. However, if that particular stock is not one that you intend to keep in your investment portfolio, it must have ample trading volume so you can get in and out without getting stuck with the stock. Since this article is not about day trading, I'll leave it to you to find out what exactly is the ideal trading volume you should be going for.
As vouchers have a very limited lifespan, it is important to make use of them their expiry dates so that they don't go to waste. After all, it's money on the table for your taking.
How I quadrupled my stock's dividend yield by using Tiger Brokers' stock vouchers
After such a long article, I bet you are wondering what I did with my Tiger Brokers' stock vouchers.
Here's my thought process.
First, I wanted to pick a stock that has low volatility so that there is a low risk of the stock price dipping after my purchase has completed. I mean, it would have been great if the stock went up after I invested but the worse case scenario would be if the stock went down so much that it's no longer worth selling and benefiting from the stock voucher.
Second, I think it would be ideal to pick a stock that is low volatile and is priced at under $1. There are two benefits for this. The bid and ask price spread would be $0.005 instead of $0.01 for stocks priced above $1 and I would only need less than $100 to make full use of the stock voucher's cash rebate. Even if I were to buy a lot of a particular stock at $0.990 per share and sold at $0.995 per share, I would only incur a tiny loss of $0.50 in exchange for $60 worth of cash rebate.
Third, I intend to keep my stock purchase at the minimum of 1 lot so that the combined platform and commission fees are very low. For Singapore stocks,
0.04% x Trade Value
0.04% x Trade Value
0.0075% x Trade Value
0.0325% x Trade Value
The combined fees for 100 shares of a stock priced at $0.99 per share is $0.12. If you also have a commission-free voucher, you'll only have to pay $0.08. Ultimately, the total commission and platform fee for the trade is negligible in the grand scheme of things when you have a stock voucher.
Let's talk about my execution.
My stock of choice is NetLink Trust. It's one of the few stocks in my investment portfolio that I bought with my bonus years ago. The reason for choosing this stock is because I have already done some research of my own in the past and have some inherent confidence.
The good thing is that this stock has low volatility so I do not need to worry about a sudden dip in price and that the stock has what I'd consider as ample volume to do a quick buy and sell if I wanted to.
Before I go further, I must caveat that I am not recommending you to trade shares of NetLink Trust. It'd be a fool's errand to simply follow what I am doing. You should pick your own stock based on what you are knowledgable and confident in.
Now let's look at the transaction that I have done.
As you can see from the screenshot, I purchased 100 shares of NetLink Trust at $0.965 per share with a commission and platform fees of $0.12. After adding the rebate of $70.01 and commission-free discount of $0.04, my total cost works out to be $26.57 which equates to $0.2657 per share.
Based on NetLink Trust's total dividend payout of $0.051, this 100 shares have a dividend yield of 19.1%!
Now it sounds like a huge percentage and all, I must say that in the grand scheme of things, it's only $5.10 of dividend per year.
No big deal or anything, we are simply taking free Tiger Brokers money off the table. Got free money, just take lah!
Alternative: How to turn your Tiger Brokers' stock vouchers into cash
Let's say you don't want the stock and just want the cold hard cash.
My Plan B is to sell off my NetLink Trust shares at the same price of $0.965 per share and make a small loss with the commission and platform fees of $0.08 which is negligible because of the $70.01 cash rebate from the stock voucher in the bag.
Now, I didn't intend to sell my shares but I queued for it anyway and the order got filled in the afternoon.
I look at the $0.16 ($0.08 fees from the purchase and $0.08 fees from the sale) that was charged, as a rebate fee of sorts in exchange for a cash rebate of $69.85.
Still a pretty good deal no matter how I look at it.
Are you making full use of your Tiger Brokers stock vouchers?
If you already have some investment trades in mind that you intend to make for your investment portfolio, then make good use of your stock vouchers and don't do what I did.
But if you simply registered and funded your Tiger Brokers account to receive the free share and you happen to receive a stock voucher either by referring your friends, give my hack a try.
Let me know what you think in the comments section below.
Again, if you have not registered and funded your Tiger Brokers account (I can't understand why you wouldn't after reading all the way to the end of this article), click on the button below to start. Trust me, you have nothing to lose.
Register your account today
Tiger Brokers is currently giving a free Apple share, 60 commission-free trades within 180 days and 500 Tiger Coins when you register a new account with Tiger Brokers and fund at least SGD 2,000 in a single transfer within the promotion period.
Note: Promotion is valid as of 1 August 2021