Working in finance, the founders of Tornado saw the stark divide between the tools available to institutional investors and to individuals. They were also alarmed by the platforms encouraging frequent trading, rather than intelligent investing. They knew anyone could become a better hands-on investor with the right resources, so they set out to level the playing field. Tornado is the first investing platform that combines next-level tools with hyper-tailored investing news and discussion. The more you engage, the smarter you get, and the more you gain—no matter where you’re starting from.
How you make money
Through technology and collaboration, you can unlock the collective experience of other smart investors, and easily build a portfolio optimized just for you. Tornado users with at least 6 months of history are ranked by annualized returns, and they display the current, anonymized ideas from the top 10% of these users.
Tornado's technology is based on independent, Nobel Prize-winning research and years of investing experience at hedge funds. In 1 click you can intelligently allocate your portfolio to seek the best risk/return right now. The goal of the Optimizer is to build a portfolio from your investment ideas that maximizes your expected return while staying within an acceptable level of projected risk. The algorithm will only include stocks and ETFs that you’ve selected, so you’ll always know what’s in your portfolio.
How Tornado makes money
As a trading platform, there are a multitude of ways that Tornado earns money. These include:
- Monthly subscription fee: The subscription costs $4.99 for live trading accounts. The subscription gives you 25 commission free trades per month. If you do not have the subscription or run out of trades, it will cost you $4.50 per trade.
- Rebates from market makers and trading venues: Market makers (typically big institutions/funds) buy directly through the brokers to have discounted purchases. For that ability, the market makers pay a rebate to the brokerage to receive their orders . The brokerage sends your orders to the market maker that is most likely to execute at the best price for you and makes a few cents on each trade.
- Income generated from cash: They borrow the cash sitting in your account and invest it into interest earning accounts and keep the profit.
- Stock loan income from counter-parties: They receive interest for loaning out shares for short sales.
- Margin Lending: They collect interest on money they lend to investors
Is it safe?
Tornado was founded in 2015, and has since raised over $14 million through six rounds of funding. Most recently, in July of 2021 they secured $10 million in funding from investors including A Rod and Dave Portnoy.
The Securities Investor Protection Corporation (SIPC) covers your brokerage account up to $500,000 in value of securities, including up to $250,000 of cash. Accounts at Tornado are protected by additional coverage of $150mm in aggregate, including up to $37.5 million for any single customer's securities and $900k for any single customer's cash. This policy was purchased by Apex Clearing and underwritten by Lloyd's of London. As with SIPC insurance, this coverage does not protect against market losses. There is always volatility risk when investing in equities, but the extra insurance that Nvstr has can allow you to confidently invest using their platform.