Disclaimer: This is not a sponsored post, but this article contains referral links that allow me to earn referral rewards at no cost to you if you choose to signup with my links, which helps me maintain the blog.
If you didn’t already know, Tiger Brokers is currently running a promotion where you can get commission-free trades and a free share of Starbucks (SBUX) for opening an account with them and depositing at least 2000 SGD or equivalent currencies.
I wrote a step-by-step guide about this previously, which you can check out here.
While the free SBUX share, currently valued at ~112 USD, is great, there’s 1 minor problem.
According to the terms and conditions of the signup promotion, you are only allowed to withdraw the proceeds generated from the free share after successfully completing 10 trades, with a trade value of at least 1 USD each.
This means that you can’t just sell the free share and withdraw the profits immediately – you need to actually use Tiger Brokers at least 10 times first.
The reason for this is probably so that they can earn some money from you as a customer because, for every trade you make, Tiger will charge you a commission fee and a platform fee, and the total fees are shown below.
|HK||0.06%, min 15 HKD|
|US||0.01 USD/share, min 1.99 USD|
|CN||0.06%, min 15 CNH|
|AU||0.10%, min 8 AUD|
*: The minimum fee for SG market trades for Tiger Brokers is currently waived until 31 Dec 2021.
Obviously, this is quite problematic if you originally signed up with the intention of selling the free share and never using your Tiger account again.
Luckily for you, I’m going to share with you the best way to liquidate the free SBUX share that incurs the lowest amount of costs in fees.
This method involves making 10 trades using the SPDR Straits Time Index (STI) ETF: ES3.
If you don’t intend to hold STI ETF in your portfolio, then this could be 5 buy orders and 5 sell orders.
There are a couple of reasons why this ETF, in particular, is the best to trade for this purpose.
No Minimum Fees
For one, ES3 trades on the SGX.
Tiger Brokers is currently running a promotion where the minimum broker fees are waived for all SGX trades.
This means that you will only be charged 0.08% of your total trade value for each trade instead of the minimum 2.88 SGD.
Since trades on every other exchange available on Tiger will be subjected to a minimum broker fee, trading on the SGX will incur much lower fees, especially if your only intention is to fulfill 10 trades to liquidate your SBUX share.
ES3 is denominated in SGD.
This is an advantage because this means you don’t have to convert your SGD into other currencies, protecting you from FX losses.
Small Lot Size
Next, most securities on the SGX have a minimum lot size of 100, which means that you have to trade at least 100 shares each time.
ES3 is unique because it only has a lot size of 10.
As a result, each trade you make with ES3 is likely going to be smaller in value than with another SGX-listed security unless its unit price is 10x less than that of ES3.
Low Unit Cost
ES3 is currently trading at ~3.222 SGD/unit.
Coupled with a lot size of 10, this means it only requires ~32 SGD of capital to make a trade.
This is good news because the broker fees charged to you are based on a % of your total trade value.
By keeping your trade value low, you can ensure that the fees you incur during this process are kept to a minimum.
Good Trade Volume
Since ES3 is an STI ETF, it has a decent trade volume.
This means that when you’re looking to make trades, you can be quite certain of successfully having your order filled and with a reasonable bid-ask spread.
If you’re only holding ES3 for the short-term, ie to buy and sell to fulfill 10 trades, this will help to minimise the risk of losses due to large price movements.
While there are other SGX-listed securities that trade at extremely low unit costs and would require less capital to buy a lot size of 100, these stocks tend to have very low trade volumes.
This makes it hard to trade since there are very few people looking to trade them.
Consequently, the bid-ask spread is likely to be big, and you may incur losses.
Between all of the factors listed above, you should be able to quickly fulfill 10 trades with ES3 while minimising any losses, allowing you to withdraw your profits from the free SBUX share.
Liquidating Stock Vouchers
Trading ES3 is also a good way to liquidate stock vouchers in Tiger Brokers.
For those who are not familiar, stock vouchers are cash rebate vouchers issued by Tiger Brokers, and you can get them via referral rewards or by exchanging Tiger Coins.
Stock vouchers are applied automatically when you place a buy order.
After your order has been filled, cash from the stock voucher will be rebated back into your account.
So the only way to liquidate stock vouchers is by placing buy orders.
Again, this poses a problem because stock vouchers have a fairly short redemption period of 30 days.
If you already have investments that you plan to make, then there’s no harm in liquidating stock vouchers that way.
But if you don’t, then trading ES3 is an inexpensive way to liquidate stock vouchers for the same reasons as above.
Note that in order to receive the full cash rebate of the stock voucher, the trade value of the order must be equal to or more than the value of the stock voucher.
If the trade value of the order is less than the value of the stock voucher, then the full trade value will be rebated, and the excess value of the stock voucher is forfeited.
For example, if you have a 60 SGD stock voucher and place a buy order for 32 SGD (10 units of ES3), you will only receive a rebate of 32 SGD, and you basically threw away 28 SGD (unfortunately based on personal experience).
So you’ll want to make sure that you place a trade big enough to receive the full cash rebate from your stock voucher, unlike what I did in the above scenario.
After the order has been filled and your stock voucher has been used up, you’re free to sell away your ES3 shares.
Last Chance: Free Starbucks Share
As mentioned in this post, Tiger Brokers is giving away a free Starbucks share, currently valued at 112 USD, for opening an account with them and depositing a minimum of 2000 SGD.
Note that the very first deposit into the account must be 2000 SGD or higher, and must be successfully completed before the end of the promotion period in order to be eligible for the free share.
This promotion will only be valid until 31 May 11:59pm, so if you’re interested, be sure to open your account ASAP because it can take a day for your account to be opened by Tiger and for your deposit to be credited into your account.
Get your free Starbucks share now with my referral link!
A step-by-step guide about how to open and fund your account can be found here.
If you’re looking to withdraw your profits from the free Starbucks share quickly and not have to use Tiger Brokers again, this is the best way to do it, in my opinion.
However, if you’re not in a rush to liquidate your free share, then perhaps you don’t have to resort to this method.
Tiger Brokers is actually a good broker to use, especially for investing in the US market, due to its low fees – I personally use them as my broker of choice!
So if you’re planning to invest in the US market, Tiger Brokers is definitely worth using since you already have an account with them and any trades you make will count towards the 10 trades you need to fulfill in order to liquidate your free Starbucks share in future.
Did you get your free Starbucks share from Tiger Brokers? Let me know in the comments below!