Td Ameritrade: Buying Bitcoin Investment Trust Guide

As of September 2023, it is not possible to buy or trade Bitcoin or other cryptocurrencies directly on TD Ameritrade. However, customers can gain indirect exposure to Bitcoin through investment trusts or funds, like the Grayscale Bitcoin Trust (GBTC). This article will explore how to invest in Bitcoin through TD Ameritrade, the associated risks, and the future of cryptocurrency trading on the platform.

Connect your bank account to a third-party crypto broker like eToro

Connecting your bank account to a third-party crypto broker like eToro is a straightforward process. Here is a step-by-step guide to help you get started:

Step 1: Register and Create an eToro Account

To begin, you will need to sign up and create an account with eToro. This is a simple process that involves providing some personal information and creating a secure password. eToro also offers a user-friendly mobile app that you can download and use to register.

Step 2: Link Your Bank Account

Once you have an eToro account, the next step is to link it to your bank account. This will allow you to transfer funds between your bank and eToro account seamlessly. Log in to your eToro account and follow the instructions to link your bank account. You may be asked to provide your bank account details, such as account number and routing number.

Step 3: Transfer Funds to Your eToro Account

After successfully linking your bank account, you can now transfer funds from your bank to your eToro account. This can be done through ACH bank transfers, which are electronic transfers processed by the Automated Clearing House Network. ACH transfers are a convenient and secure way to move funds between your bank and eToro account.

Step 4: Purchase Bitcoin

With funds in your eToro account, you are now ready to buy Bitcoin. Look for the "BUY" button next to Bitcoin (BTC), and decide on the amount you want to purchase. You can choose to buy a specific dollar amount or a certain number of units. Once you've made your selection, click on "OPEN TRADE," and the Bitcoin will appear in your portfolio.

Step 5: Store and Secure Your Bitcoin

EToro offers a secure digital crypto wallet called eToro Money, which you can use to store, receive, and transfer your Bitcoin. The eToro Money wallet is highly secure and offers features like DDoS protection and standardisation protocols to protect your cryptocurrency from unauthorised access. You can download the eToro Money app on iOS or Android and access it using your eToro credentials.

By following these steps, you will be able to connect your bank account to eToro and start investing in Bitcoin. Remember to do your own research, understand the risks involved, and only invest what you can afford to lose.

Buy Bitcoin futures contracts through the brokerage

As of September 2023, it is not possible to buy or trade actual Bitcoin or crypto on TD Ameritrade. However, you can buy and sell Bitcoin futures contracts. Note that owning futures contracts is not the same as owning Bitcoin.

• Learn the Basics of Bitcoin Futures Trading: Understand that futures contracts trade differently from stocks, funds, and fixed-income instruments. Bitcoin futures have high margin requirements, and the minimum fluctuation for a futures contract is $25 per contract and $5 for calendar spreads. Trading times for bitcoin futures are from 5 pm to 4 pm CST, Sunday through Friday, with an hour of inactivity between 4 pm and 5 pm.
• Choose a Futures Exchange and Broker: Select a futures exchange that offers Bitcoin futures contracts, such as the Chicago Mercantile Exchange (CME) or the Chicago Board Options Exchange (CBOE). Ensure that the broker you choose is reputable and regulated, such as a member of the National Futures Association (NFA) with oversight by the Commodity Futures Trading Commission (CFTC).
• Open an Account with a Registered Futures Broker: You will need to open an account with a registered futures broker, such as TD Ameritrade, to maintain your account and guarantee your trades. These brokers are known as Futures Commission Merchants (FCMs) or introducing brokers (IBs). Note that to trade Bitcoin futures on TD Ameritrade, you will also need to open a futures account with Charles Schwab.
• Build a Trade Plan: Develop a trading plan based on careful analysis of the Bitcoin futures market. Consider your objectives, risk tolerance, technical and fundamental analysis indicators, types of orders, and how you will monitor the market and price developments.
• Practice with a Demo Account (Optional): Consider using a demo or virtual account offered by your broker to test your trading plan and get a feel for real-time trading without risking any capital. This step can help you identify any issues with your trading plan and build confidence before committing your funds.
• Fund Your Account and Start Trading: Once you are ready, add funds to your account and start trading Bitcoin futures in a live account. Remember that trading futures may require more capital than trading spot currencies, so ensure you have enough funds to meet margin requirements. Keep in mind that trading with real money may affect your emotional state and trading decisions.

By following these steps, you can gain exposure to the Bitcoin market through Bitcoin futures contracts on TD Ameritrade without directly owning the underlying cryptocurrency. Remember that trading Bitcoin futures involves substantial risk and is not suitable for all investors. It is always recommended to consult with a financial advisor or conduct thorough research before making any investment decisions.

Trade Bitcoin futures through the platform

As of September 2023, you cannot buy or trade actual Bitcoin or crypto on TD Ameritrade. However, you can trade Bitcoin futures contracts through their platform. To do this, you will need to open a futures account with Charles Schwab as well.

Trading Bitcoin futures is not the same as owning Bitcoin. When you trade futures, you are speculating on the future price of Bitcoin without purchasing the cryptocurrency directly.

Futures contracts are agreements to buy or sell a predetermined amount of a commodity or financial product on a specified date. They are typically highly leveraged, meaning a relatively small amount of money can control a large amount of underlying value.

Micro Bitcoin futures are a smaller version of larger contracts linked to the cryptocurrency and require less money upfront. Micro Bitcoin futures may offer lower-cost and lower-risk exposure to Bitcoin, as well as other potential benefits such as greater diversification and capital efficiency.

Before trading Bitcoin futures, investors should understand the unique risks of these markets. Trading in futures involves substantial risk and is not suitable for all investors. It is always a good idea to speak with a financial advisor or do thorough research before getting started with any kind of investment.

Open a futures account with Charles Schwab

As of September 2023, you cannot buy or trade actual Bitcoin or crypto on TD Ameritrade. However, you can trade Bitcoin futures contracts through their platform, although this requires opening a futures account with Charles Schwab.

• Ensure you have an eligible brokerage account with Charles Schwab. If you are a new client, you will need to open an eligible brokerage account before applying for a futures account.
• Navigate to the Trade > Futures page on the Charles Schwab website and apply for a futures account.
• Familiarize yourself with the thinkorswim® platforms, which offer a range of tools and solutions for futures traders. These platforms include features such as an easy-to-use bid/ask price ladder, one-click order entry, customizable charting, advanced order types, and precise entry and exit points.
• Access educational resources provided by Charles Schwab to develop your knowledge of futures trading. This includes courses, webinars, and market insights from futures trading specialists.
• Contact the Trade Desk team at Charles Schwab for live support and to discuss trade ideas or clarify any doubts about the basics of futures.
• Select a futures market to trade. Consider exploring futures related to companies, industries, or sectors you are already familiar with.
• Form an opinion on the future price movement of your chosen futures market, conducting thorough research and understanding the associated risks.
• Develop a trading plan, considering your risk tolerance, profit or hedge objectives, and an exit strategy.
• Place and manage your trade by submitting an order for execution using the thinkorswim bid/ask price ladder.

Please note that trading in futures contracts carries substantial risk and may not be suitable for all investors. It is recommended to consult with a financial advisor or conduct thorough research before initiating any investment.

Buy and sell Bitcoin stocks

As of September 2023, it is not possible to buy or trade Bitcoin or other cryptocurrencies directly on TD Ameritrade. However, you can buy and sell Bitcoin futures contracts or Bitcoin stocks on the platform.

Buying Bitcoin Futures Contracts on TD Ameritrade

To buy Bitcoin futures contracts on TD Ameritrade, you will need to open a futures account with Charles Schwab, as well as a TD Ameritrade account. You can then trade CME Micro Bitcoin Futures, which offer contracts for 1/10th of a Bitcoin, or CME Bitcoin Futures, which offer contracts for one Bitcoin.

It is important to note that trading futures contracts is not the same as owning Bitcoin. When you trade futures, you are speculating on the future price of Bitcoin without purchasing the cryptocurrency directly.

Buying Bitcoin Stocks on TD Ameritrade

You can also gain exposure to Bitcoin on TD Ameritrade through publicly traded investment trusts or funds, such as the Grayscale Bitcoin Trust (GBTC). This option allows you to invest in companies that hold large amounts of cryptocurrencies.

Alternative Options

If you are looking to buy and trade Bitcoin directly, you can use a crypto broker alternative to TD Ameritrade, such as eToro. eToro is a widely trusted multi-asset investing platform that offers over 70 cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin.

Frequently asked questions