How to Trade on Global Stock Exchanges: An Investing Guide | Raiffeisen mTrader
Investing in financial instruments is easily accessible and convenient through the new mTrader functionality within the My mBanka mobile application of Raiffeisen banka. This guide explains how you can independently use the bank's brokerage services, what financial instruments you can trade, what types of orders you can place, and how to make the most of the mTrader platform.
What Is mTrader and How Can I Use It?
mTrader is one of the features within the Moja mBanka app that enables online trading of financial instruments.
To use mTrader, you need to have a signed brokerage representation agreement for the purchase and sale of financial instruments, the Moja mBanka mobile app activated and the following accounts opened with Raiffeisen banka a.d. Beograd:
- Securities accounts for trading on the Serbian market and on foreign markets.
- Dedicated cash accounts for trading (both dinar and foreign currency accounts).
Please find more detailed Instructions on using mTrader functionalities in our Knowledge Base.
How Individuals Can Use Raiffeisen Brokerage Services
As an individual investor, you can invest in global markets through Raiffeisen banka in three ways:
- Independently through the mTrader platform within the Moja mBanka mobile app
- By email via the Moja mBanka mobile app and internet banking (available to clients using the Private Banking Package during designated order submission hours).
- Directly at the bank’s branch offices authorized to accept trading orders during designated order submission hours.
What Can I Trade? Financial Instruments Available
Stock Trading
A stock represents an ownership stake in a company. When you purchase a stock, you become a shareholder of that company and may be entitled to a share of its profits (dividends) as well as potential capital appreciation.
Example: If you buy shares of Tesla, you own a small part of the company. If Tesla performs well, the value of your shares may increase; if it performs poorly, the value may decrease.
Stock Trading Benefits
- Potential for high returns
- Voting rights at shareholder meetings
- Possible dividend payments
Risks
- Market price risk – the stock value may vary (increase or decline), depending on numerous factors, such as interest rates, economic conditions, central bank policies, inflation, etc.
- Risk of losing invested capital if the stock declines or the company that issued the stock performs poorly.
- Currency risk, if the stock is denominated in a foreign currency and the stock value changes
ETFs (Exchange Traded Funds)
ETF is an investment fund traded on a stock exchange just like shares. It tracks a particular index, sector, commodity, or basket of assets. By purchasing a single ETF, you gain exposure to multiple securities at once, providing diversification.
Example: An ETF tracking the S&P 500 index includes shares of 500 leading U.S. companies
Advantages of ETF Investing
- Diversification through a single investment
- Lower costs compared to traditional funds
- Easy buying and selling on exchanges
Potential Risks
- Market price risk of the ETF and its underlying assets (as wich stocks)
- Interest rate risk depending on the ETF's composition (the structure of financial instruments the ETF is based on)
- Tracking risk, where the ETF may not perfectly match its benchmark index (which may result in a difference in ETF returns and the index or reference value it is based on)
- Currency risk, in case the ETF value changes.
ADRs and GDRs
ADR (American Depositary Receipt) and GDR (Global Depositary Receipt) allow investors to invest in foreign companies without directly trading on foreign exchanges.
ADR: Represents shares of a foreign company traded on U.S. exchanges such as NYSE or NASDAQ.
GDR: Similar to an ADR but traded across multiple international markets such as London and Frankfurt.
A single ADR or GDR may represent one share, multiple shares, or even a fraction of a share. This relationship is known as the conversion ratio and is defined at the moment of ADR, i.e. GDR issuing.
Benefits
- Access to foreign companies without currency conversion
- Trading on familiar exchanges
- Transparency and regulatory supervision
Risks
- Currency risk in case of ithe currency value of the instrument changes
- Market price risk of market price change of ADR/GDR (same as with shares)
- Risk of capital loss if the underlying company that issued these instruments performs poorly
- Geopolitical and regulatory risks – changes in relevant regulations and/or changes in practice of managing and regulatory bodies of the state-issuer of ADR/GDR may have a negative impact on investment profitability. When investing in ADRs/GDRs, there is a risk of double taxation, e.g. the dividend which the investor receives may be taxed both in the company’s country of origin, as in the country where the investor has tax residency.
Types of Orders Available Through the Bank
Available order types depend on whether you are trading on the Belgrade Stock Exchange or on foreign markets.
If the client places an order for trading financial instruments on the domestic market, it is possible to place all orders available on the Belgrade Stock Exchange, namely: market orders, limit orders, as well as all special types of orders, described in detail below.
Regarding the order validity period, on the domestic market it is possible to place a daily order or an order valid until a specific date, with a maximum duration until December 31, 2037.
A market order can only have a daily validity period.
If the client places an order for trading financial instruments on foreign markets, only buy or sell limit orders can be placed.
Orders on foreign markets can have a maximum validity period of 30 days.
Additionally, the client may cancel issued orders if certain conditions explained later in this document are met.Below is an explanation of how limit and market orders work, the order cancellation process, as well as special orders that canonly be placed on the Belgrade Stock Exchange.
Market Order
A market order is an instruction to buy or sell a financial instrument immediately at the best available market price.
Benefit: Fast order execution.
Downside: No control over the price – the transaction is executed at the current available market price, which may fluctuate.
Example: If you want to sell company shares immediately, the market order will be executed at the highest price currently offered by a buyer.
Limit Order
A limit order is an instruction to buy or sell only at a specified (or better) price set by you.
Benefit: You have full control over the price at which you wish to trade.
Downside: The order may not be executed if the market does not reach that price.
Example: If you want to buy shares at a price of 100 RSD, and the current market price is 105 RSD, your order will remain active but will not be executed until the price drops to 100 RSD or lower.
Previously placed orders can be canceled in mTrader by submitting a cancellation order. The concept of order cancellation is explained below.
Cancellation of Issued Trading Order
A cancellation order requests the withdrawal of a previously submitted buy or sell order before it has been fully executed.
When Is It Used?
A cancellation order may be used in case:
- You change your mind about buying or selling.
- You want to modify an existing order's conditions (price or quantity), so you need to cancel the existing order.
- An error was made during order entry.
Important Notes
Cancellation is possible only after the order has reached the market and has undergone processing.
- It is possible only if the order has not been fully executed.
- If partially executed, only the unexecuted portion can be canceled.
- Cancellation must be submitted through the same platform or intermediary used to place the order.
Example: If you placed a limit order to buy shares at 100 RSD but then decided to change the price, you must first cancel the original order and then submit a new one.
Special Orders
Fill or Kill (FOK)
The order is executed immediately in its entirety; otherwise, it is canceled.
Immediate or Cancel (IOC)
The portion of the order that can be executed immediately is executed, while the remainder is canceled.
Block Trade Order (available only through an authorized branch office)
Used for transactions conducted outside the regular market, typically between institutional investors.
Order Submission and Trading Hours
Trading order submission times are defined in the rules and procedures of the Investment Banking Department.
Clients can independently submit buy and sell orders for domestic and foreign securities through the mTrader feature within the My mBanka application.
When orders related to the purchase or sale of securities are placed through the "mTrader" application within the Moja mBanka mobile app, the client submits the order in accordance with the mTrader User Guide.
All orders submitted during the trading hours of a particular market are immediately forwarded to the local exchange.
Orders submitted outside market hours will not be accepted.
Available funds are automatically checked before accepting an order.
Orders without sufficient coverage are rejected.
Clients must ensure that all their trading activities comply with the Serbian Capital Market Law, the Law on the Prevention of Money Laundering and the Financing of Terrorism, Law on Foreign Exchange Operations, the National Bank of Serbia foreign exchange regulations and other applicable regulations.
The bank will reject any order that does not comply with these laws and regulations.
Concluding Remarks
mTrader is not a trading platform, but an application that enables placing online orders for trading financial instruments. The application is not intended for professional users and disables buying and then selling the same instrument on the same day (“intraday trading”).
For these reasons, the bank does not bear responsibility for any damage or losses that may arise due to interruptions, malfunctions, delays, or other technical issues related to the use of the Moja mBanka application, including problems with software, internet connection, or other related applications and systems.