American Depositary Receipts are certificates representing ownership of foreign company shares and are traded on American stock exchanges. ADRs are issued by US banks who buy actual shares in overseas companies. ADRs give a chance to invest and also receive dividends in dollars in companies outside of the US. All that while leaving the investors free of worry when it comes to currency exchange.

Some ADRs can be subject to periodic fees or charges, generally to compensate the relative bank providing custodial services. These fees can vary but currently are not passed on to you if you own ADRs on the Lightyear platform.

Please note that Lightyear cannot give tax advice about ADRs as it depends on individual circumstances and we recommend seeking a licensed professional where needed.

ADRs (American Depositary Receipts)

Orders, portfolio and general trading topics

Trading & investments

Any instruments you purchase through Lightyear are yours. You would be the “beneficial owner” of those instruments (shares or ETFs) and they are held in a clients' assets account on your behalf. You retain all the rights and benefits of being a shareholder, and Lightyear, where possible, also provides information about corporate events. Your stocks may allow you to vote in shareholder meetings if applicable. 

US shares are registered with the DTCC (Depository Trust and Clearing Corporation) which is the central securities depository of the United States.

For European securities, we partner with several CSD’s (Central Securities Depositories), examples of which include Euroclear, CREST and Clearstream, depending on which market the security is traded and hence registered.

Any instruments you purchase through Lightyear are yours

Are securities I buy held in my name?

You can easily change the currency that your overall portfolio is displayed in by:

- Selecting your initials in the top left corner when signed into your Lightyear account
- Scroll down and select “Settings”
- Choosing the currency you wish to view your overall holdings in

Important things to know about this:

The currency setting you can select will only ever impact your personal portfolio view. It will give you an estimation of what the sum of all your investments are across any market or currency you’re currently invested in, no matter the denomination(s) of the instruments or cash balances you hold. For example, your portfolio currency is set to GBP, and you hold 100 GBP in cash balances, and 100 USD in securities, we would use the currency exchange rate from the previous business day to display a conversion of the 100 USD and add it to the 100 GBP held to give you a total estimated portfolio value.

We use the “end of previous business day” exchange rate to estimate the value of your portfolio in your chosen currency. The value you see is only ever an estimation and for the most accurate amount, we always suggest you view your portfolio in the same currency as your investments whenever possible.

Individual instrument data will always be shown to you in the currency they are traded in. For example, instruments listed on US markets that are traded in USD will always be shown to you in USD on their respective screens. This is to ensure you know what currency you need to have to buy the relative instrument, as well as to show you more accurate data rather than using an estimated converted value.


Choosing your portfolio currency

**For instruments held on US markets:**

A dividend tax is automatically withheld for all dividends received from US listed companies in accordance with US tax regulation and, it's not an option to pay this tax at another point. The remaining proceeds of dividends are paid as cash to your US Dollar account balance.

Lightyear automatically generates and submits an IRS W8-BEN form on behalf of our users based on the information provided at registration to reduce the withholding tax rate where applicable. Please contact our Support team if your details are incorrect or have changed to ensure your tax reporting is accurate.

Currently, for tax residents of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain, and the United Kingdom, the dividend withholding tax is 15%. 

For tax residents of Greece, the dividend withholding tax is 30%.


Dividend taxes

We don’t offer any of these right now but that could change in future. 

Do you offer options, CFDs, mutual funds or futures trading?

Yes, we pay out any dividends that you are eligible to receive.

**How do I know if I’m eligible for a dividend?**

You’ll usually need to own the relative stock or instrument on or before a specified date, known as the “ex-dividend” date. This date is announced by the company usually a few weeks before the dividend payment date. If you purchased the stock after this date, you won’t be eligible. You’ll be able keep track of upcoming dividend payment dates in the Lightyear app by checking the Investment Calendar.

**When will I receive my dividend?**

We normally receive dividends within one business day of the payment date and allocate them as quickly as possible to your account. You don’t need to do anything, it will automatically be credited and you’ll receive a notification as well as a record in your activity feed. 

**Do you pay dividends for applicable fractional shares?**

Yes we do, rounded to the nearest cent. You’ll receive the relative percentage proportionate to the amount of the share you hold, e.g if you hold 0.5 of a dividend paying share, you’ll receive 0.5 of the dividend amount.

**Dividend taxes**

Dividends are usually subject to regional withholding tax which is automatically deducted. We display the relative tax rate and deducted amounts to you in the dividend activity.

For eligible non-US taxpayers, we have submitted the relative W-8 BEN form to reduce your dividend withholding tax rate from 30 to 15% for any US dividends you receive.

What are they and how do they work on Lightyear

Do you pay dividends

An “Order”, in investment speak, simply refers to an instruction that you place to your broker (in this instance, Lightyear). This instruction tells us to either buy or sell a security within a certain set of parameters, depending on the type of order you place.

All Lightyear users currently have access to both Market and Limit order types for submitting buy or sell instructions.

Each order type has its own pros and cons, let’s dive into how they work and what the tradeoffs are.

**How do Market orders work?**

This is the most basic type of order. A Market order set by you instructs Lightyear to either buy or sell a security at the current market price*. These orders are executed as soon as possible, meaning if created during market hours, execution time is usually seconds. There are some caveats to this, such as the size of the order, with larger orders generally taking longer to fill depending on the available liquidity. If buying a security that has low trading volumes, it could also take longer to execute your trade.

Market order pros:
- Simple and easy
- Fast execution

Market order cons:
- No guarantee on the fill price: You could receive a fluctuating price to what you expected, especially during volatile periods
- Setting a Market order while the market is closed exposes you to the generally increased volatility of the first few minutes of trade each market day

*Market price: it’s important to note that this term reflects the current real time price a security is trading for, and this changes intra-second. The price you see displayed in the Lightyear app or any investment platform (including google) is only ever an estimation.*

**How do Limit orders work?**

Here we start to get a little more complex, with Limit orders allowing you to dictate the maximum buy price, or minimum sell price, of an order. This means that your order will only be executed at your specified price or better, minimising the exposure to fluctuating market prices.

The tradeoff here is that unlike Market orders, which generally execute quickly, Limit orders risk never executing if the market price does not reach the specified price set by you.

Limit order pros:
- Lets you set a specific execution price

Limit order cons:
- Slow execution time vs Market orders
- Risk of never executing if your price is not reached
- Not available for fractional shares


Market vs Limit orders: What are they?

You can see your estimated profit and loss (PnL) data in the Lightyear app.

Your portfolio balance is the sum of the approximate value of all your Investments and Cash, taking into consideration your deposits minus withdrawals. It’s important to note that the PnL displayed is only an estimation, as both currency and investment valuation can fluctuate in real time. We use the end of the previous day's exchange rate to give you an estimation for what your portfolio is worth and display it in the currency of your choice. 


The **“Your investments”** view presents you the PnL for each of your individual investment positions separately and the data will always be shown in the currency they are traded in. You can organise the returns as you wish by tapping on the filter button at the top right corner, and also dig deeper into many metrics of your individual position by tapping on one. You can learn more about these metrics from our related blog post "[Making sense of stock data & metrics](https://golightyear.com/eu/blog/making-sense-of-stock-data-and-metrics)".


In the **“Portfolio”** view, on top of your aggregated individual investment PnL, the displayed calculation also takes into consideration any PnL from foreign exchange on cash balances you have. For example, if at the time of your conversions, £1 was worth $1.2 but now the same £1 would be $1.1, this $0.1 you received when the exchange rate was higher, will be added as your gain.

It is important to take note, that the PnL values you see are only ever an estimation and to see the most accurate amount in your portfolio, we always suggest you view your portfolio in the same currency as your investments whenever possible. Read more about the in-app viewing currency from our article [“Choosing your portfolio currency”.](https://golightyear.com/help/trading-and-investments/choosing-your-portfolio-currency)


In the individual **“Your Investment”** view, alongside many metrics, targets and news, you’ll see a separate PnL section for the position.
- The _Current value_ represents the estimated value for your whole investment. For a stock price, we use the last known trading price which can change intra second while the market is open. After the market closes, we show you the value based on the global closing price. Please note that the transition time from the last known trading price to the closing price after the market closes can be a couple of hours.
- The _Price per share_ shows the current average price for all your buys since you opened the position, as the view uses your entire activity with this instrument. As per standard method for calculating average price entry, to reset the calculation the position should be closed completely, and it would reset when opened again.

Please note that Lightyear cannot give tax advice as reporting profits and losses depends on individual circumstances. We recommend seeking a licensed professional where needed.


Learn about profit and loss views in Lightyear app

Profit and loss

Investing on auto-pilot

Repeat orders allow you to automate investing into your favourite stocks and ETFs, which means you no longer need to time the market. You can have full flexibility on deciding when these orders start and on what days they repeat, as well as cancelling them at any time straight from the app.

You can choose to buy a specific monetary amount, or to purchase a certain number of shares each time.

If the market is closed at the time of your scheduled repeat market order, then it will be placed on the next day the market is open. If there aren't enough funds on the account at the time of a scheduled Repeat Market Order, it will be skipped and your order will not be placed. The next repeat order will be filled once you have available funds, if the instruction for the repeat order has not ended in the meantime. 

**How do you set up a Repeat Order?**

Once you have selected “buy” on the stock or ETF, you can toggle between “[market order](https://golightyear.com/eu/help/trading-and-investments/market-vs-limit-orders-what-are-they)”, “[limit order](https://golightyear.com/eu/help/trading-and-investments/market-vs-limit-orders-what-are-they)” and “repeat order” under the name of the instrument. Once you select the “repeat order”, you can select the frequency and start date. Placed repeat orders will be displayed under pending orders with a cancel button next to each entry in case you wish to opt out.

Repeat order pros:

- Helps automate healthy investing habits and dollar cost averaging strategies, making putting your periodic savings to work easier than ever before
- Simply skipped if no funds are on your investment account
- You can opt out at any time from uncompleted transactions 

Repeat order cons:

- You may forget that you have them set up
- Markets and global economic environments can change over time. It’s important to regularly review your investment strategy 
Remember, your capital is at risk so never invest more than you can afford to lose


Repeat Orders

At this time, we don’t support tax advantage account schemes such as ISAs and SIPPs in the UK, or the *investeerimiskonto* (investment account) in Estonia.

**UK** 

ISAs are on our long term roadmap, which we currently estimate for early 2023 as we work on obtaining the relative licence from the UK regulator to be able to offer this ourselves.

**Estonia**

Under Estonian legislation that's currently in force, only banks can offer the *investeerimiskonto*, and Lightyear Europe holds an investment firm license from the Estonian Financial Supervision and Resolution Authority (Finantsinspektsioon). We hope that the legislation will change in the future though so that we would be able to offer them.

Tax-advantaged accounts

Price movements are a natural occurrence for all Stocks, ETFs and any other type of exchange traded security. Volatility alerts are designed to inform customers of larger than usual price movements. There are many reasons why a price may change significantly, including dividend ex dates, other corporate actions, general market movements, etc.

These notifications are indicative and are only informative. They are not intended for action or to cause panic. Trying to time the market is riskier than continuous investing and investing in highly volatile stocks can be higher risk. For any assistance, please reach out to our Customer Support team.

Volatility alerts

A fractional share is “a fraction of a share", i.e less than one.

Lightyear offers the opportunity to buy fractional amounts for a lot of the shares we have on our platform to create more equal access to investing. Not everyone has the capital to invest in companies whose share price is in the hundreds or thousands per share.

For example if a company had a listed share price of 1000 USD and it was available as a fractional share, you would be able to buy 0.1 of that share for 100 USD.

This isn’t available for all shares but we’re working on increasing this range.

**Do you pay dividends for applicable fractional shares?**

Yes we do, rounded to the nearest cent. You’ll receive the relative percentage proportionate to the amount of the share you hold, e.g if you hold 0.5 of a dividend paying share you’ll receive 0.5 of the dividend amount.

To find out more about what dividends are and when we pay them, see our [“Do you pay dividends”](https://golightyear.com/help/trading-and-investments/do-you-pay-dividends) help article.


...“a fraction of a share", i.e less than one

What are fractional shares?

A share or stock split is a type of “corporate action” a company can take, and indicates that the company has, or is intending to, increase the total number of its shares. 

Companies usually do this to make their shares more accessible for investors, for example: 

- a company's shares are trading at 100 USD each
- it undergoes a 10 for 1 split 
- the new trading price of a single share is 10 USD

A single share for 10 USD may be a more accessible investment for persons who would not have considered, or had the capital to invest at the pre-split price.

Existing shareholders will have their positions proportionally adjusted. In the above example, an existing shareholder who had 1 share in a company that underwent a 10 for 1 split would then own 10 shares. It’s important to note that the value of that position is not directly affected by the split as the price of each share will split as well.

The split ratio can vary, some recent examples include:
- Tesla (TSLA) [announced](https://www.sec.gov/Archives/edgar/data/1318605/000156459022028207/tsla-ex991_6.htm) a 3 for 1 split in H2 2022
- Amazon (AMZN) [announced](https://www.forbes.com/advisor/investing/amazon-stock-split/#:~:text=Amazon%20Announces%2020%2D1%20Stock,for%20people%20looking%20to%20invest.%E2%80%9D) a 20 for 1 split in H1 2022


On the other hand, a reverse stock split is a corporate action where the instrument’s shares in total are decreased. This increases the stock price proportionally but does not impact the company’s value.

Lightyear users who own applicable shares in a company undergoing a split will be notified shortly before the split date with the details as every split is unique. Fear not though, we’ll process the split automatically for you.

What is a stock split?

Today, our customers have access to over 3000 mixed fractional and non fractional stocks from US and EU markets as well as access to global ETFs. Stocks listed on UK markets are coming soon.

You can find out exactly what you’ll have access to in our [“What services do you offer and who is eligible?”](https://golightyear.com/help/getting-verified/what-services-do-you-offer-and-who-is-eligible) article.

Which markets do you currently offer

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