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Trade Motifs

What are commission-free trades?

Commission-free trades are motif portfolio or single stock trades that carry no commission fees when executed.

In a Motif trading account, all professional motif and single stock trades (outside of built or community motifs) are commission-free when you select the option to trade at next market open. Auto-reinvest dividends, auto-invest, and auto-rebalance trades of professional motifs are also commission free.

With an optional Motif BLUE subscription, you get three commission-free real-time trades and five commission-free next market open trades for motifs built by you or the community per month. Unused commission-free trades do not roll over to subsequent months.

In a Motif Direct Index account or Impact account, all trades are commission free.

What are “next market open” trades?

When placing a market order, you will have the option to execute it in real-time or at the “next market open”. When selecting “Next market open” or if the trade is placed after market hours, it will be scheduled to be executed when the market opens on the next trading day (9:30am ET).

The benefit for selecting this option is that these trades carry no or reduced commission fees. All automated trades (e.g. auto-invest, auto-rebalance) are also executed at the next market open.

Keep in mind, placing market orders at market open can be considered risky because a lot can change from market close one day to market open the next. For example, company’s earnings announcement with significant news, world events, and activity in international markets can all create volatility in overnight stock prices.

What is a motif?

A motif is a basket of up to 30 stocks or ETFs intelligently weighted to reflect an investment theme, market insight or innovative trend. Choose from one of our professionally built motifs, customize, or design your own. Then buy your motif in just one click.

To build your own motif, click “Build a Motif” under “Trading” in the navigation menu.

When placing an order, why do I need to reduce the dollar amount of my trade when I try to use 100% of my buying power?

To accommodate potential price fluctuations when placing an order, a “buffer” is put in place to help reduce the possibility that you spend more than your available buying power. A 2% buffer is required for real-time trades, while a 5% buffer is required for next market open trades.

What about taxes?

When you buy a motif, you own each stock it contains individually – that can be as many as 30 stocks. To do that, we actually place a separate trade for each stock. For each of those individual stock trades, Pershing LLC, our clearing partner, will provide you with cost basis and proceeds documentation.

One advantage of owning the individual stocks is you have greater control over the potential realization of gains and harvesting of losses.

You will receive a Form 1099 reporting the sale of any stock(s) made during the year.

Motif does not offer tax advice; we recommend you consult your tax advisor regarding your individual situation.

How are professional motifs built and how are securities selected?

In Trading accounts, you can view the Motif Construction Process to get information on how motif portfolios in our professional catalog are built and how securities are selected.

For details on how we built a particular motif portfolio, go to the Overview page of the motif and click the “How We Built This Motif” link.

In an Impact account, your funds are invested across seven asset classes, optimized for your selected asset allocation. Click here to learn more about our Impact Portfolio investment methodology.

In an Direct Index account, your funds are invested in the underlying stocks of the index, such as the Motif 500. The Motif 500 index is designed to measure the market performance of U.S. stocks trading on U.S. exchanges. The index captures the performance of the top 500 largest market cap companies and is weighted by a float-adjusted market cap.

What is settlement?

After you buy or sell securities, settlement occurs when the security or cash proceeds is transferred to your account. This is commonly referred to as “T+2” which stands for “trade date plus two days.” It can take up two days after the order executes for the transaction to settle and is the industry standard.

Can I add a stock/ETF to a motif I already own?

Yes, you can add a stock/ETF to a motif you already own. You can also trade single stocks and ETFs individually either in whole or fractional shares.

To learn more about trading single stocks and ETFs click here.

Are motifs ever updated?

Yes. Given the daily movements in the stock market, the weights of securities within a motif are subject to change. In addition, companies enter and exit businesses. As a result, it is important to rebalance motifs from time to time. We rebalance the motifs in the catalog on an annual and quarterly basis. If you own a motif that has been rebalanced, we’ll notify you so that you can follow the rebalance if you choose.

Are motif trades real-time?

When placing a motif portfolio trade in a trading account, you may have the option to execute it in real-time or at the next market open. Choose the real-time option if you want your trade to be executed immediately during market hours.

With this option selected, your order will be immediately placed for each individual security contained in the motif. And, if you decide to sell a motif, or selected individual securities it contains, those orders will be sent to the market for execution in real-time. A commission fee may apply — see Fee & Commission Schedule for details.

Trades placed in Motif Direct Index and Impact accounts are executed at the next market open.

How are the default weights in a motif determined?

The securities in motifs that reflect ideas or themes are weighted based on their exposure to that theme, including adjustments based on factors such as the market capitalization of each company and recognition of pure-play companies. However, the weightings change as the prices of the securities within the motifs change.

What’s the minimum investment amount to buy a motif?

To invest in a motif, you can start investing for as little as $300. Keep in mind, however, there is no minimum amount required to open an account with us. To trade on margin, you’ll need a minimum balance of $2,000. Please note that margin trading is not applicable to IRAs.

What securities does Motif Investing support?

All US exchange-listed stocks, ETFs and ADRs.

What is a watchlist?

You can add any motif, stock, or ETF – including motifs you built yourself – to a watchlist. A watchlist makes it easy to track performance of your favorite motifs, stocks, or ETFs.

You can access your watchlist by going to the “Trading” menu and clicking on “Watchlist”.

How is the Motif Index calculated?

The Motif Index level represents the performance of a benchmark motif (a motif in our catalog) over time. It is set at 1000 on the date of inception of the motif. For example, a Motif Index of 1100 represents a 10% return since inception. Similarly, the change in the Index over a specified period represents the period return on the portfolio holding the same share weights as the benchmark motif.

How do you compute the dividend yield on a motif?

The composite dividend yield on a motif is the weighted average of the dividend yield of the individual securities in the motif.

How is the volatility measurement of a motif calculated?

The volatility measurement for a motif represents the annualized standard deviation of daily returns on a portfolio holding the same share weights as the motif. It is measured in a range from Low to High. Since the standard deviation of returns is commonly used as a measure of portfolio risk, a High volatility measurement indicates that holding the motif in the past subjected the holder to higher fluctuations.

Where do you get the duration of the ETFs?

The duration of the ETFs is obtained from the fact sheet of each individual ETF provided by the issuer. Motif updates the duration on a quarterly basis.

How do I sell a motif?

You can sell the entire motif or individual securities in the motif you already own. You can sell your motif in these places:

  • Click “Trade” on the positions page and enter the amount you want to sell, or select “Sell All” in the drop-down menu if you want to sell the entire motif;
  • Click on a position on the positions page and click the “Trade Motif” button on the Overview page of that position.

What’s the minimum amount to sell a motif?

The minimum amount for a sell order is $250 unless you’re placing a “Sell All” order to sell the entire motif you own.

Can limit orders apply to the stocks in the motif?

Yes. You can place buy or sell limit orders on one or more stocks in the motif you own. You can also place a buy limit order to add a new stock to the motif (but this would only work if your motif contains 29 or fewer stocks since a motif contains at most 30 stocks).

In all cases, you can place limit orders on fractional shares. For example, you can set a limit order to buy 0.55 shares when XYZ’s share price reaches $20. You will get the best market price available real time for fractional shares, just like you do for whole shares.

When I add money to a motif, how is it distributed to the stocks/ETFs I already own?

Money is distributed proportionally among all your stocks/ETFs based on your current allocation. Since security prices are constantly changing, so are the dollar weights of the motif you own. The dollar weights of the stocks/ETFs at the time of new purchase will be the same as the dollar weights of the stocks/ETFs you own at that moment. This is to ensure that adding or removing money from a motif will not alter its performance trajectory in percentage terms.

What if I have ideas for other motifs?

If you want to invest in an idea, but can’t find a motif for it, you can build your own motif from scratch. To build your own motif, go to “Trading” menu and click “Build a Motif”.

You can also tell us about your idea and we’ll consider building a motif around it. Email your idea to ideas@motif.com.

Do fixed income motifs include individual bonds or mutual funds?

No, at this point our fixed income motifs only include ETFs.

I have a motif order marked “Partial Failure” on my Order Status page. What are the “Archive” and “Repair” links for?

If any stock in your motif order is not filled entirely, your order will have a “Partial Failure” status and you will have the following options:

  • Archive: The “Archive” link will move the order from the Current Orders page to the Orders History page and remove the “Repair” link. Your position in the motif will remain as is. If the failed order is for a benchmark motif (a motif in the catalog), the order needs to be filled in its entirety for your position to track the benchmark. Archiving a failed order will remove the “Repair” link and will result in a custom motif. For example, “archiving” a partially failed order for the “Hot Retail” motif will change its name to “myHot Retail” on your Positions page so you know the stock compositions of this motif are different from the benchmark motif.
  • Repair: The “Repair” link will create a new market order for the parts of the order that were not filled. You will have the opportunity to review the order prior to placing it.

How do Trading Alerts work?

Trading Alerts are designed to inform you whenever a motif you own reaches a specific value.

How do I establish and manage my trading alerts?

From the “Trading” menu at the top of the page, select “Trading Alerts”.

How can I be notified when my alert is triggered?

Trading Alerts can be set up to notify you via email and text message. Once a Trading Alert reaches the trigger value, you will be notified via the methods you selected.

What happens to my alert after it is triggered?

After you are notified, the alert will be turned off. You can turn it back on and/or change the trigger value at any point from the Trading Alerts page or your Positions page.

Why did my Trading Alert Turn Off?

The most common reasons for why Trading Alerts turn off are:

  1. Your alert was triggered and the notification was sent. Confirm the trigger value and how you chose to be notified.
  2. A corporate action on one of the underlying motif securities took place. Once the corporate action is processed you will be able to re-enable your alert. Corporate actions take about 2-3 days to process.
  3. There was a trade on one of your positions that is tracked by a Trading Alert. You can re-enable your Trading Alert at any point from the Trading Alerts page or positions page.

For more information on why your alert was disabled please contact Customer Service at 1-855-586-6843

What happens when I buy/sell a motif that has a Trading Alert attached?

Whenever you buy or sell more of a position that has a Trading Alert associated, the Trading Alert will turn off. You can turn it back on from the Trading Alerts page.

Do I still have to take action after my alert is triggered?

If you want to execute a trade, yes. Trading Alerts are a notification only and will not take action on your account. After you are notified that your alert has triggered, you would need to log in to your account and take action if you want to execute a trade.

Can I trade options?

No, at this time we do not support option transactions.