If you do not find the information you are looking for, you can send your questions via the contact form.
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What are the minimal hardware and software requirements for using Renesource Capital trade platform?
For Basic or Exclusive services there are no specific requirements. Having a low-end PC with Internet access is enough. There are also no special software requirements. The only requirement is a web browser Internet Explorer 4.0 or higher.
For faster communication with support service, especially when you need to resolve issues which require prompt action, we recommend using ICQ (you can download the program from www.icq.com).
To use Professional services you would have to install special software Frontend Trading System, which you can order from us. Professional service can work normally even on low-latency Internet connections, but a dedicated line with a reliable connection is recommended. The speed of Internet connection is not as important as its stability, which mostly depends on your Internet provider. A high-end machine is also required, at least Pentium II or Pentium III with 4MB or higher video memory and at least 64 MB of system RAM.
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Does Renesource Capital have rights to provide stock brokering services in the US stock markets?
Renesource Capital is a brokerage company, officially registered and licensed in Latvia. The Latvian legislation allows licensed brokerage companies to provide services in any financial or commodity markets. All Renesource Capital staff also has all necessary licenses needed for working with clients.
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What is the minimal deposit required to open an account?
Minimum deposit required to open an account: 2,000 USD - Basic, 10,000 USD - Exclusive, 15,000 USD - Professional. But you must take into consideration that the smaller your deposit, the fewer options you have to diversify your investment, which leads to increased investment risk. And please bear in mind that according to the rules of day trading you need to have at least 25,000 USD in your own funds; whatever type of account you have chosen
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What happens if in the process of investing the account balance falls below the allowed minimum?
The term "minimal admissible amount" is applicable for the day trading account and for the Professional account. If the Professional account balance falls below 5,000 USD, it is automatically blocked from opening new positions, until the minimum balance of 5,000 USD is restored. If a day trading account balance falls below 25,000 USD in your own funds, it is blocked from day trading activities. There is another limit for the Basic account; if the account's balance falls below 2,000 USD, it loses its solvency, i.e. you can't make short selling, or buy shares on credit. If at this moment the debt to Brokerage Company or short position already exists, it must be immediately closed
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What happens with the money on an account, which is temporarily not invested?
These funds (for Basic and Exclusive services) are automatically sent to so-called Money Market Fund, which regularly adds on dividends on deposits. If you buy securities, money will be automatically withdrawn from this account, and you don't pay any commission on this transaction. There is no such service for Professional service, because it is meant for active trading.
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I have heard that besides using my own money it is possible to get credit for buying securities. Is this true?
If the total account value is more than 2,000 USD, you have an option of using the brokerage credit on so-called margin account. But first of all, before using it you must learn the peculiarity of its application. Secondly, it is important to realize although your purchasing power will increase, so will the risk of your investments.
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Does your company allow buying securities issued by Russian companies?
Yes, but only by the companies, which are allowed to trade in US market (if they have American Depositary Receipts - ADRs). Examples of such companies include Tatneft, Rostelecom, and Vympelcom.
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If I decide to close my account, will I have to pay for it?
We hope that you will have no reason for this action. Nevertheless the procedure of closing the account is free of charge for the Client and money will be sent back at once. The cost of the bank transfer depends on the bank commissions and usually is about 15-40 USD. Please remember that you can get money from your account only on the third day after the transaction is processed (Rule T+3).
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Our corporation is registered in Cyprus. Are there any restrictions for opening an account?
This is a typical question nowadays. The international organization established for fighting money laundering (FATF) is publishing a list of so-called non-cooperative countries periodically. Finance institutions are recommended to be very prudent with the residents (especially corporate) of these countries. Cyprus (Malta, BVI, Belize) is not on the list and we don't see any problems in this case.
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I am not a resident of US. Will my investment income be taxed in US?
The answer might depend on your individual situation, and that is why we recommend consulting with your tax adviser. But in general, for nonresidents (both corporate and individual) only the distributed dividends and interests are taxed. The tax is deducted when the money is transferred to your account. Highest possible rate is 30%. But it can be essentially lower if there is an agreement between US and the country of your residence. It's essential that nonresidents (in general case) are not due to pay taxes on capital gains. For example if you buy shares for 10,000 USD and sell them month later for 20,000 USD, no income taxes are deducted in the USA. But it doesn't mean that you are not obliged to pay taxes in the country of your residence.
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Is information about my transactions sent to IRS? And if it is sent, what particular kind of information?
The reports about all your dividends, interests, transactions (showing dates, amount of shares and total sum of stock) are sent to the IRS (Internal Revenue Service) with a copy sent to you. Your task for preparing the annual tax report is to show the purchase for every sale - with dates and amounts. That's why it is very important to keep all transaction notifications (especially monthly statements). Options transactions were not reported to IRS till the present moment, but these transactions are not exempted from paying taxes.
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I had lost most of my investments during the bank crisis in Russia. What guaranties and investor protection mechanisms can you offer?
The distinguishing feature of a civilized and developed market is protection of rights and properties of investors. In this criteria, US stock market is considered to be one of the safest in the world. Every investment account is ensured for a lump sum of money. It is a question of a broker-dealer abilities and responsibility of the clearing company, but not a risk of the investment concerned with the selection of the object for investments.
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Can I change a password by myself?
It is not only possible but is also necessary. As practice shows, the main danger of losing information and unauthorized manipulations of an account is due not the possibility of getting unauthorized access to the broker's site, but to clients' carelessness providing easy access to a password for their friends and family.
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Is it possible to trade futures?
Yes, it is possible to trade future. The futures market operates differently from regular market and may be less suited for particular investors. Every market has its certain pluses and minuses and if you want to work in the commodity market you have to indicate it in account opening application. In this case the service and corresponding trade platforms will be provided.
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How can I diversify particular indices?
A new kind of shares appeared in the market lately - the so-called "index" shares, such as QQQ (NASDAQ100), DIA (Dow Jones Industrial Average), SPY (S&P 500) that gives the sufficient diversification of investments even at the low investment volume. There is possibility of investments both in the indices of different countries and in the different industries. The examples of such kind of investments are Exchange Traded Funds (ETFs), HOLDRS and iShares.
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Can I place both stop and limit orders simultaneously?
Unfortunately, this cannot be done. It is technically difficult to guarantee a protection against double execution. This kind of allocation is possible through a backing service, which charges a separate fee. The trading system will accept only one request for closing. Regarding open positions, you can place two stop orders in opposite directions but you must be sure the purchasing power is sufficient for both transactions.
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What is day trading? Are there any restrictions?
Day trading is opening and closing of a position during one trading day. In accordance to new rules (09.2001), a day trading account must have at least 25,000 USD in your own funds.
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What is SEC Fee on some of transaction notifications? Is it charged on top of a regular commission?
According to the rules currently in force (Section 31 of the Securities Exchange Act of 1934), 1/300 part of every share and option sale is paid to support, supervision, and regulation of the stock market. If you want to determine the amount of tax, divide the total sale volume by 30,000. For example, for the shares that cost 10,000 USD the quantity is only 0.33 USD. Only the seller is charged and the tax is recorded on a special line in the transaction notification. SEK Fee is not raised on bonds and other promissory notes transactions.
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Do you have any commissions discount plan tied to the transactions volume per specific time frame such as per day, per week, per month, etc.?
Yes, we do, but only for the Professional service.
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Can I login into my account from different computers?
Yes, of course. But you must make sure that nobody gains an access to your password. And do not forget that professional service needs an installation of trade platform software.
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What is a split?
A split is a division of a share by a definite ratio into multiple shares. For example if a company announces a split 1:3, it means that every share will be exchanged by three shares. Accordingly, there will be 3 times more shares in circulation and the shares will be 3 times cheaper when they appear in the market. There is also a reverse split, when the number of shares in the market decreases.
It is important to realize that a split does not mean any change in the basic foundations of a company. It does not mean that a share lowered in price, since you are paying the same price for the same share of the company. Many people consider a split as a sign preceding growth, but in most cases it is just a psychological effect. After the split the shares can grow or fall and you must be careful trying to make profit.
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How long can I hold an open short position?
This is a very important question. Usually you can hold a short position (short sale) as long as you need, provided you have enough deposit. Nevertheless you must realize that these shares were borrowed from someone and due to its rules, a clearing company can demand a closing of a position for a share refund. Sold options can be refund in the same way. Such situations are rare, but you must understand it and take the possibility of such risk into consideration.
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Can I use the bonus from sold Call covered options to acquire extra shares?
In most cases, yes. But please bear in mind that your own funds will be limited by the price of the strike option. For example 1,000 shares of ABC are bought at the price of 18 USD, and 10 Call options are sold for the price of 5 USD. If options have a strike of 20, then the whole premium of 5,000 USD will increase your own funds. If the strike is 15, only 2,000 USD will increase your own funds, because 3 USD of these options are in the money.
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What is ECN? And why is it recommended for the active traders only?
ECNs (Electronic Communication Networks) are alternative electronic virtual trading floors, where buy and sell orders are automatically matched to each other. Trading through ECNs is also called Direct Access, because the order sent to ECN doesn't go through a market maker or a stock exchange specialist. ECNs main advantages are: faster application input and real-time information about current profits and losses, information about remaining Buying Power, and Level II quotations. For active traders ECN is a necessity, however the system does have its drawbacks:
- Complexity of the trading platform requires deeper knowledge from traders of the market and specific features of every particular ECN etc.
- Impossibility of placing GTC orders
- Lack of opportunity to invest in Money Market Funds (it means that funds that are not invested, as a rule, do not make a profit)
- Likelihood of error entering an order (if you don't need high speed entering of data, it is better to have an opportunity to look through the order before sending it for the execution)
- It is difficult to contest bad executions once they happen, because you have no one to deal with (the basic service gives you opportunity to deal with a market maker).
This is the reason why if you are a long-term, a middle-term investor, or just a beginner, the use of the basic service may have its advantages over the premium services.
