Elon Musk is known as one of the most influential people in the world. He runs Tesla – the most valuable automobile company in the world, SpaceX – the leading private space exploration company, and the Boring Company – a firm working to revolutionize transportation. Despite all his success, the question remains of which broker Elon Musk uses to manage his financial portfolio.
Experts suggest that Elon Musk uses a brokerage firm called Interactive Brokers which is an international firm based in Greenwich, Connecticut. It offers a variety of services for trading equities as well as derivatives, fixed income and commodities. Interactive Brokers is well-known for its low fees and margin rates – some of the lowest in the industry – and its sophisticated web-based trading platform. Additionally, its margin rates let investors borrow money from the broker to invest in stocks and other investments, making it an attractive option for those who have cash flow constraints.
Another broker firm which Musk might use is Fidelity Investments, one of the largest and most admired investment firms in the world. While Fidelity is considered to be a bit more expensive than Interactive Brokers, it is well-known for its excellent customer service and wide selection of securities. The firm also offers a wide range of advanced trading technologies, including a patented artificial intelligence trading platform designed to help investors make decisions faster and more accurately.
Lastly, Goldman Sachs, the global investment bank, might be another broker firm Musk turns to. Goldman Sachs is a formidable player in the stockbroking market and is known for its first-class service and expertise. In addition to its own proprietary trading platform, the firm also offers access to most of the leading stock exchanges, mutual fund companies and hedge funds.
Analysis and insights
Elon Musk is an astute investor and will look for the broker that offers the lowest costs and fees, and the best technological capabilities. It is likely that he performs careful due diligence before deciding on a broker, and then goes for the one that allows him to capitalize on the best opportunities. Moreover, closely following regulatory changes, customer service standards and having the latest technologies available will all be taken into consideration.
Given that he is listed as the 35th wealthiest person in the world in 2019 according to Forbes, Elon Musk is likely to use more than one brokerage firm. So, it is not impossible to assume he also uses Fidelity, Goldman Sachs or any of the other prominent brokerage firms in order to diversify his investments.
Impact on trading activity
Elon Musk’s choices of broker are likely to have a big impact on trading activity in the stock markets. He is known to be a risk-taker and speculator, which means that he is likely to go for brokers with less regulation, more leverage, and more advanced trading technologies. If a broker firm can attract him as a client, it is likely to have an impact on that firm’s reputation, as investors might see this as an endorsement of their services and capabilities.
Moreover, given that Musk is an active and influential investor, any changes in his investment activity – even subtle ones – are likely to affect the markets as other investors might imitate what he does, by opting for similar broker firms or replicating his investments.
Price comparison
Elon Musk is likely to use brokers that offer lowercommissions and fees, so Interactive Brokers at 4.95 USD per trade, Fidelity with seven USD per trade and Goldman Sachs with $5.00 per trade are most likely his choice. This is compared to conventional brokers such as TD Ameritrade’s 9.99 USD per trade, or E-Trade’s 6.95 USD per trade, indicating that Musk looks for the lowest costs for his investment transactions.
However, it is important to note that costs are not the only thing that must be taken into account. As noted earlier, customer service, name recognition and technological capabilities are also important in the choice of a broker.
Risk assessment and management
Elon Musk has demonstrated that he is willing to take prudent risks, such as buying shares in risky, speculative stocks. In order to minimize his risks, he likely relies on brokers that provide research, investment advice, and risk management tools to help him assess the potential risks and rewards of his portfolio choices.
For example, Interactive Brokers offers a trading platform called Risk Navigator, which helps investors assess the risks associated with their trades and provides tools for monitoring the performance of those risks. This would allow Musk to identify potential investment opportunities and make decisions that minimize potential losses.
Conclusion
Given his popularity, dynamic approach to business, and of course his wealth, it is highly likely that Elon Musk uses more than one broker. He appears to have chosen some of the best brokers given the criteria of lowest cost, sophisticated web-based trading platforms and access to the major stock exchanges. With a focus on risk management tools, customer service and technological capabilities, it is likely that Musk is able to maximize returns on his investments across multiple brokers.
