Investing Archives

Sep

2025

What are the different types of investment fees?

Investment Fees Explained: Definition, Types, Costs

By Colin Dodds | Growing Wealth, invest, Investing | Comments Off

Table of Contents

What Are Investment Fees?
Why Are Investment Fees Charged?
Who Charges Investment Fees?
6 Common Types of Investment Fees
Cost of Investment Fees
Pros and Cons of Investment Fees
How Much Is Too High a Price To Invest?
FAQ

No matter what kind of investments an individual makes, they’ll likely face some kind of investing fee. Investment fees are the charges investors pay to use investment products and services, such as management fees, brokerage fees, and commissions.

Over time, fees can make a profound impact on potential returns. That’s why it’s important to understand those fees, and how they may affect your strategy. Here’s a closer look at the types of investment fees investors may come across.

Key Points

• Investment fees, such as management and trading fees, can vary widely, often around 1% for management.

• Many brokerages and investment platforms have gotten rid of commissions for several types of trades in recent years.

• Over time, fees can significantly reduce investment returns, impacting overall gains.

• Broad-index ETFs and mutual funds generally have lower fees compared to specialized funds.

• Hedge funds traditionally charge “2 and 20,: a fee structure that includes a percentage of assets managed, as well as a performance fee.

What Are Investment Fees?

Investment fees are charges investors pay when using financial products, whether they have short vs. long-term investments. Investing fees can include broker fees, trading fees, management fees, and advisory fees.

Broadly speaking, investing fees are structured in two ways: recurring or one-time transaction charges. Recurring is when the charge is a portion of the assets you’ve invested, usually expressed as an annual percentage rate. One-time transaction charges work more like a flat fee, such as a certain number of dollars per-trade.

💡 Quick Tip: Investment fees are assessed in different ways, including trading costs, account management fees, and possibly broker commissions. When you open an investment account, be sure to get the exact breakdown of your “all-in costs” so you know what you’re paying.

Why Are Investment Fees Charged?

Like any purchase you make, there are fees for investment products and services. For instance, a broker will typically charge a fee for buying and selling stocks or managing your portfolio.

While some investing fees and expenses may seem small, over time they can make an impact on your investment and can affect the value of your portfolio. As an investor, it’s important to be aware of these fees and understand exactly what you’re being charged to help make sure you’re getting a good return on investment.

Who Charges Investment Fees?

Financial professionals such as brokers, financial advisors and financial planners usually charge investing fees and expenses. Brokerage firms typically charge fees and commissions. And there are investment fund fees for various financial products, such as mutual fund management fees and fees for operating and administering a 401(k).

6 Common Types of Investment Fees

Generally, there are a handful of different types of investment fees that investors should know about.

1. Management Fees

When it comes to types of investment costs for mutual funds, every mutual fund charges a management fee. And other investment vehicles, such as hedge funds, do as well. This pays the fund’s manager and support staff to select investments and trade them according to the fund’s mandate. In addition to the manager, it also covers the administrative expenses of managing the fund.

This fee is typically assessed as a portion of an investor’s assets, whether the investments do well or not. Some investments, such as hedge funds, charge a performance fee based on the success of the fund, but these are not widely used in most mutual funds.

Management fees vary widely. Some index funds charge as little as 0.10%, while other highly specialized mutual funds may charge more than 2%.

Management fees are expressed as an annual percentage. If you invest $100 in a fund with a 1% management fee, and the fund neither goes up or down, then you will pay $1 per year in management fees.

2. Hedge-fund Fees: Two and Twenty

The classic hedge-fund fee structure is known as “two and twenty” or “2 and 20.” This means that there’s a 2% management fee, so the hedge fund takes 2% of the investor’s assets that are invested. And then there’s a 20% performance fee, so with any profits that are made, the hedge fund takes an additional 20% of those returns.

So let’s say an investor puts $1 million into a hedge fund, and the firm makes a profit of $500,000 in a year. That means the hedge fund would take a management fee of $20,000 plus a performance fee of $100,000 for a total compensation of $120,000.

Bear in mind, investors who are clients at hedge funds are typically institutional investors or accredited investors, those typically with a net worth of at least $1 million, excluding their primary residence. Hedge funds also tend to have higher minimum initial investment amounts, ranging from $100,000 to $2 million, although it varies from firm to firm.

Due to lackluster performance and competition however in recent years, the classic “two and twenty” hedge-fund fee model has become challenged in many years. Many hedge funds now offer rates like “1 and 10” or “1.5 and 15”–a trend dubbed as “fee compression” in the industry.”

3. Expense Ratio

The expense ratio is the percentage of assets subtracted for costs associated with managing the investment. So if the expense ratio is 0.035%, that means investors will pay $3.50 for every $10,000 invested.

The expense ratio includes the management fee, and tells the whole story as to how much of the fund’s assets go toward the people running and selling the fund.

In addition to management fees, a mutual fund may charge other annualized fees. Those can include the fund’s advertising and promotion expense, known as the 12b-1 fee. Those 12b-1 fees are legally capped at 1% annually. But when added to the management fee, it can make a fund more costly than at first glance. That’s one reason to double check the expense ratio.

Another reason is that the expense ratio may actually be lower than the management fee. That’s because some mutual funds will waive a portion of their fees. They may implement a fee waiver to compete for the dollars of fee-wary investors. Or they may do so as a way to hold onto investors after the fund has underperformed.

In the 2010s, some money market funds waived or reimbursed some of their fees after historically low bond yields wiped out any return they offered to investors. While mutual fund companies can reimburse part or all of a fund’s 12b-1 fee, it happens very rarely.

4. Sales Charges

In addition to the annual management and possibly also 12b-1 fees, mutual fund investors may pay sales charges.

Typically, these charges only apply to mutual fund purchases that an investor makes through a financial planner, or an investment advisor. This fee, also called a sales load, is how the advisor gets paid for their service. It isn’t a transaction fee however. Rather it’s a percentage of the assets being invested.

While the maximum legal sales charge for a mutual fund is 8.5%, the common range is between 3% and 6%.

These sales charges can come in different forms. Front-end sales charges come out of an investor’s assets at the time of the sale. Back-end sales charges, on the other hand, are deducted from the investment when the investor chooses to sell. Lastly, contingent deferred sales charges may not come out at all, if the investor stays in the fund for a specified period of time.

5. Advisory Fees

When an investing professional–a financial planner, advisor, or broker–offers advice, this is how they’re paid. Some advisors have a business model where they charge a percentage of invested assets per year. Other advisors, though, charge a transaction fee, in the form of a brokerage commission. Lastly, some simply charge an hourly fee.

Asset-based money management fees are usually expressed as a percentage of the assets invested through them. Typically, a hands-on professional will charge 1% or more per year for their services. That fee is most often deducted from an account on a quarterly basis. And it comes on top of the fees charged by any professionally managed vehicles, such as mutual funds.

But that fee can be much lower for automated investing platforms, also known as “robo-advisors.” Some of these robo-advisors charge annual advisory fees as low as 0.25%. But it’s worth noting that these platforms often rely heavily on mutual funds, which charge their own fees in addition to the platform fees.

Robo-advisors are famous for having rock-bottom fees. However, when investors are comparing robo-advisor fees, they’ll see that there’s a wide range. The minimum balances can also determine what sort of fees investors pay, and there may be additional fees like a potential set-up payment.

Recommended: Are Robo-Advisors Worth It?

6. Brokerage Fees and Commissions

When an investor wants to buy or sell a stock, bond or an exchange traded fund (ETF), they typically use a brokerage firm. Fees and commissions vary widely depending on the type of transaction and the type of broker. Those fees can be based on a percentage of the transaction’s value, or it can be a flat fee, or a combination of the two.

And when investing, that fee depends on whether an investor uses a full-service broker or a discount broker. While a full-service broker can offer a wide range of advice and services, their commissions per trade are far higher than a discount or online brokerage might charge.

Because discount brokers offer less in the way of advice and services, they can charge a lower flat fee per trade. In recent years, the biggest online brokerage firms have offered free trading, partly due to competition and partly because they instead get paid through a practice known as payment for order flow.

Payment for order flow, or PFOF, is the practice of retail brokerage firms sending customer orders to firms known as market makers. In exchange, the brokerage firms receive fees for that order flow.

While widespread and legal, payment for order flow has been controversial because critics say it misaligns the incentives of brokerage firms and their customers. They argue that customers may actually be “paying” for their trades by getting worse prices on their orders. Defenders argue customers get better prices than they would on public exchanges and benefit from zero commissions.

💡 Quick Tip: Are self-directed brokerage accounts cost efficient? They can be, because they offer the convenience of being able to buy stocks online without using a traditional full-service broker (and the typical broker fees).

Cost of Investment Fees

The cost of investment fees can vary depending on the type of fee, who is charging it, and the type of account an investor has. For instance, a standard management fee is about 1%.

A broker or brokerage might charge an annual fee of $50 to $75 a year. Not all brokers have an annual fee, so try to find one that doesn’t.

A broker might also charge anywhere from a few dollars to $30 for research. Again, not all brokers levy this charge, so choose a broker that doesn’t charge for research.

In addition, trading platform fees may range from $50 to $200 or more a month. You might also have to pay transfer or closing fees of $50 to $75 to have the brokerage transfer your account elsewhere or close it out.

Pros and Cons of Investment Fees

There are obvious drawbacks of investment fees. The biggest: Investment fees can diminish the returns on your investments. For instance, if your return was 8%, but you paid 1% in fees, your return is actually 7%. Over the years, that difference can be significant.

When it comes to benefits, there may be some advantages to using a fee-only financial advisor over one who charges commissions. For one thing, the costs may be more predictable. A financial advisor may charge a flat fee or charge by the hour. In contrast, a financial advisor who works on commission may suggest financial products that they earn commission from. In addition, many fee-only advisors are fiduciaries, which means they are obligated to act in the client’s best interests at all times.

Each investor should find out the specific fees involved relating to their investment. And don’t be afraid to ask questions. It’s critical to know exactly what you’ll be paying and what those costs cover.

How Much Is Too High a Price To Invest?

The cost of investment fees varies widely, depending on the type of fee. Advisory fees of more than 1% may be considered too high a price for many investors. Sales charges typically range between 3% and 6%, so anything higher than that might be something to avoid.

Of funds that charge fees, broad-index ETFs and mutual funds often charge the lowest fees.

The Takeaway

No matter how an investor gets into the market, they will pay some kind of fee. It may be the quarterly deduction made by a financial advisor, or the trading costs and account fees of an online brokerage account, or the regularly deducted management fees of a mutual fund.

Those fees and commissions add up to the “cost of investment.” That cost is deducted from assets and represents a drag on any return an investor may earn over time. As such, investing fees require close attention, regardless of an investor’s strategy or long-term goals.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

¹Opening and funding an Active Invest account gives you the opportunity to get up to $3,000 in the stock of your choice.

FAQ

What are typical investment fees?

Typical investment fees include broker fees, trading fees, sales charges, management fees, and advisory fees.

Investment fees tend to be structured either as recurring fees, in which the charges are a percentage of the assets you’ve invested, or as one-time transaction charges that are similar to a flat fee, such as a certain amount of money per-trade.

Is a 1% management fee high?

A 1% management fee is a fairly typical fee. However, even though it is standard, you can try negotiating for a smaller fee than 1%. Some financial advisors may be willing to lower the percentage.

How much should you pay for investment management fees?

Generally, you can expect to pay about 1% for an investment management fee. Overall, percentage fees like this tend to be best for investors with smaller investments, while a flat fee tends to be more advantageous to investors with a very large investment (meaning more than $1 million).

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

¹Claw Promotion: Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Probability percentage is subject to decrease. See full terms and conditions.

Disclaimer: The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.

Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by emailing customer service at [email protected]. Please read the prospectus carefully prior to investing.

Mutual Funds (MFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or clicking the prospectus link on the fund's respective page at sofi.com. You may also contact customer service at: 1.855.456.7634. Please read the prospectus carefully prior to investing.Mutual Funds must be bought and sold at NAV (Net Asset Value); unless otherwise noted in the prospectus, trades are only done once per day after the markets close. Investment returns are subject to risk, include the risk of loss. Shares may be worth more or less their original value when redeemed. The diversification of a mutual fund will not protect against loss. A mutual fund may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

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This article is not intended to be legal advice. Please consult an attorney for advice.

SOIN-Q325-124

Sep

2025

Understanding the Different Stock Order Types

By Austin Kilham | Growing Wealth, invest, Investing | Comments Off

Table of Contents

Stock Order Types Explained
Trailing Stop-Loss Order
Bracket Order (BO)
Timing Instructions
Which Order Type Is Best?
FAQ

There are several ways to execute stock trades, from the common and relatively simple market order, to more complex stop orders and timing instructions. Each type of order is a tool tailored to specific situations and needs of an investor or trader, and can result in a different outcome.

It’s important to understand the types of order in the stock market thoroughly to know when and how to use them. That way, you’ll be able to know which order will best help you reach your goals as you buy and sell stocks.

Key Points

• Market orders guarantee execution but not price, trading at the current market rate.

• Limit orders specify a price or better for buying or selling, offering more price control.

• Stop orders trigger when a stock reaches a set price, helping to lock in profits or limit losses.

• Stop-limit orders combine stop and limit features, providing execution control at a specific price.

• Timing instructions, such as Day Orders, GTC, IOC, and FOK, modify order duration and execution conditions.

Stock Order Types Explained

Different types of stock orders have different outcomes for investors. The best stock order type for you will depend on your investing style and risk appetite. You’ll need to understand each of them, particularly if you’re working with a self-directed brokerage account.

Here’s a look at the different types of stock orders:

Market Order

A market order is an order to buy or sell a security as soon as possible at its current price. These types of orders make sense when you want to get a transaction done as quickly as possible.

A market order is guaranteed to be carried out, or executed. Investors buying stocks with a market order will pay an amount at or near the “ask” price. Sellers will sell for a price at or near the “bid” price.

However, while you’re guaranteed that your order will execute, you do not get a guarantee on the exact price. In volatile markets, stock prices may move quickly, deviating from the last quoted price, although.

For example, if you put in an order to buy a stock at an ask price of $50 per share, but many other buy orders are executed first, your market order may execute at a higher price as demand rises.

Recommended: What Is a Market-On-Open Order (MOO)?

Limit Order

Limit orders are another common type of stock orders. They are orders to buy or sell stock at a specific price or better within a certain time period. There are two basic types of limit orders:

• Buy limit orders can only be executed at the limit price or lower. For example, say you want to buy shares in a company only when prices hit $40. By placing a limit order for that amount, you can ensure your order only executes when that price, or a lower price, is reached.

• A sell limit order executes when stock hits a certain price or higher. For example, if you don’t want to sell your stock until it hits $40 or more, a sell limit will ensure that you own the stock until it hits that price.

Stop Order

In addition to the more commonly used market orders and limit orders, brokerage firms may also allow investors to use special orders and trading instructions, such as the stop order, also known as a stop-loss order. Stop orders are orders to buy or sell a stock when it reaches a predetermined price, known as the stop price. Stop orders help investors lock in profits and limit losses.

When a stock’s price reaches the stop order price, the stop order becomes a market order. Like a market order, the stop price is not a guaranteed price. Fast moving markets can cause the execution price to be quite different.

Stop-limit Order

Stop-limit orders are a sort of hybrid between stop orders and limit orders. Investors set a stop price, and when a stock hits that price, the stop order becomes limit order, executed at a specific price or better.

Stop-limit orders help investors avoid the risk that a stop order will execute at an unexpected price. That gives them more control over the price at which they’ll buy or sell.

For example, say you want to buy a stock currently priced at $100 but only if it shows signs that it’s on a clear upward trajectory. You could place a stop-limit order with a stop price of $110 and a limit of $115. When the stock reaches $110, the stop order becomes a limit order, and it will only execute when prices reach $115 or higher.

💡 Quick Tip: The best stock trading app? That’s a personal preference, of course. Generally speaking, though, a great app is one with an intuitive interface and powerful features to help make trades quickly and easily.

Trailing Stop-Loss Order

Investors who already own stocks and want to lock in gains may use these relatively uncommon orders. While stop-loss orders help investors buy or sell when a stock hits a certain stop price, trailing stop-loss orders put guardrails around an investment.

For example, if you buy a stock at $100 per share, you might put a trailing stop loss order of 10% on the stock. That way, if, at any time, the stock’s share price dips below 10%, the brokerage will execute the order to sell.

Bracket Order (BO)

Bracket orders are similar to stop-loss orders in that they’re designed to help investors or traders lock in their profits or gains. They effectively create an order “bracket” with two orders: A buy order with a high-side sell limit, and a sell order with a low-side limit.

With a bracket order set up and in place, an order will execute when a security’s value goes outside of the predetermined range, either too high or too low.

Timing Instructions

Investors use a set of tools, known as timing instructions (or time in force instructions), to modify the market orders and limit orders and tailor them to more specific needs.

Day Orders

If an investor does not specify when an order will expire, the brokerage enters it as a day order. At the end of the trading day, it expires. If at that point, the brokerage has not executed the trade, it will have to be reentered the following day.

Market-on-Open (MOO) and Market-on-Close Orders (MOC)

Investors can request to buy or sell shares when the market opens at 9:30am ET, called market-on-open orders. MOO orders must typically be entered two or more minutes prior to the market opening, and can’t be changed or canceled after that point.

A market-on-close order is a request to buy or sell shares near the market’s end-of-day (4pm ET) price, though the price cannot be guaranteed. Nasdaq and NYSE set their own time limits for entering MOCs, each a few minutes before closing.

Good ‘Til Canceled (GTC)

A GTC order allows investors to put a time restriction on an order so that it lasts until the completion or cancellation of an order. Brokerage firms typically place a time limit on how long a GTC order can remain open.

Immediate or Cancel (IOC)

IOC orders allow investors to ask that the brokerage execute the buying or selling of stock immediately. It also allows for partial execution of the order. So, if an investor wants to buy 1,000 shares of a company but it’s only possible to buy 500 shares immediately, these instructions will alert the broker to buy the shares available. If the broker can not fulfill the order, or any portion of the order, immediately, the broker will cancel it.

Fill-Or-Kill (FOK)

Unlike IOC orders, fill-or-kill orders do not permit partial execution. The brokerage must execute the order immediately and in its entirety, or cancel it.

All-Or-None (AON)

Similar to FOKs, all-or-none orders require the complete execution of the order. However, AONs do not require immediate execution, rather the order remains active until the broker executes or cancels it.

💡 Quick Tip: Are self-directed brokerage accounts cost efficient? They can be, because they offer the convenience of being able to buy stocks online without using a traditional full-service broker (and the typical broker fees).

Which Order Type Is Best?

The type of order or special instructions you use when buying and selling stock depends on your goals with the transaction. Most beginner investors probably only need to execute market orders and perhaps limit orders.

Those trying to execute more complicated trades in shorter time frames, such as professional traders, may be more likely to use stop orders and special timing instructions.

The Takeaway

There are numerous types of stock orders, including limit orders, stop orders, bracket orders, and more. Investors and traders can use each individually or in concert to execute their strategy, though beginner investors likely won’t dig too far into their order tool kit when learning to navigate the markets.

Before using any of trade orders or timing instructions it’s critical to understand their function and to think carefully about how and whether they apply to your specific needs. Using the right order for your situation can potentially help you reduce risk and protect your portfolio, no matter how many stocks you own.

¹Opening and funding an Active Invest account gives you the opportunity to get up to $3,000 in the stock of your choice.

FAQ

What is the safest type of stock order to use?

The stock order type that is all but guaranteed to execute per an investor’s desires is a market order, which executes immediately and at a given price. Other order types depend on specific conditions dictated by the investor and the market.

What is the difference between stop-loss vs stop-limit orders?

The main difference between a stop-loss order and a stop-limit order is that a stop-loss order guarantees to execute a market order if the stock hits the stop price, while a stop-limit order triggers a limit order when the assigned value is reached.

What is a standard stop-loss rule?

An example of a more or less standard stop-loss rule would be setting the stop-loss order parameters at 2% of the buy price, which would mean that an investor is not putting more than 2% of their initial investment at risk.

Photo credit: iStock/Alina Vasylieva

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q325-112

Sep

2025

Comparing Stock Warrants vs Options

By Rebecca Lake | Growing Wealth, invest, Investing | Comments Off

Editor's Note: Options are not suitable for all investors. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Please see the Characteristics and Risks of Standardized Options.

Table of Contents

What Are Stock Warrants?
What Are Options?
Similarities and Differences Between Warrants and Options
Pros and Cons of Warrants
Pros and Cons of Options
FAQ

Stock warrants give the holder the right to buy or sell shares of stock at a set price on or by a set date directly from the public company that issues them, whereas stock options convey the right to buy or sell shares on or before a specific date at a specific price.

The chief difference between stock warrants and stock options is that warrants are issued directly by a company that’s typically seeking to raise capital. Options are derivative contracts that investors can trade to take advantage of price fluctuations in the underlying security.

Key Points

• Stock warrants allow investors to buy shares at a specified price on a set date, directly from the issuing company, while stock options are derivative contracts traded among investors.

• Companies typically issue stock warrants to raise capital, whereas stock options are created and traded by investors, which may allow for more flexibility in trading.

• Exercising a warrant results in the issuance of new shares, which can lead to dilution, while exercising options does not typically create new shares and is settled between traders.

• Both stock warrants and options provide speculative opportunities, but differ in terms of issuance, market trading, and potential dilution effects.

• Understanding the differences between stock warrants and options is important for investors, as each serves distinct purposes and carries unique risks and potential benefits.

What Are Stock Warrants?

A stock warrant is a contract that allows the holder the right to buy shares of stock at a future date at a predetermined price. The terms of the stock warrant typically allow the holder to purchase shares at a price that is often set above the stock’s price at the time of issue. Warrants generally have longer expiration periods than standard options, often lasting up to 10 years or more.

Companies issue stock warrants directly to investors. The companies set the terms of the warrant, including the stock’s purchase price and the final date by which the investor can exercise the warrant. Warrant holders do not have an obligation to buy the shares, but if they decide to do so they would exercise the warrants via their brokerage account.

Stock warrants are typically call warrants, which give the holder the right to purchase the shares at the predetermined price, as noted above. However, there are also put warrants, which give holders the right to sell shares at a predetermined date by the expiration date.

Public companies may issue stock warrants as a means of raising capital to fund new expansion projects. A company may also issue stock warrants to investors if it faces financial trouble and needs to raise funds to potentially avoid a bankruptcy filing.

In some cases, warrants are issued by financial institutions rather than the company itself. These are called “covered warrants” and may be cash-settled, meaning they do not result in new shares or dilution of existing shares.

💡 Quick Tip: Did you know that opening a brokerage account typically doesn’t come with any setup costs? Often, the only requirement to open a brokerage account — aside from providing personal details — is making an initial deposit.

What Are Options?

An option is a contract that gives holders the right, but not the obligation, to buy (in the case of a call option or sell, in the case of a put option, an underlying security on or before a specified date at a specified price. As with stock warrants, option holders do not have to buy or sell the underlying shares, but they have the right to do so. If they do, they would exercise the options through their brokerage account.

Exercising options means you use your right to buy or sell the option’s underlying shares. If an investor chooses not to exercise the option, it expires worthless. (Note that the seller, or writer, of an options contract is obligated to fulfill the terms of the contract if it’s exercised.) Investors can trade some options on a public exchange alongside stocks and other securities.

Recommended: How to Trade Options: An In-Depth Guide

Similarities and Differences Between Warrants and Options

Warrants and options sound alike and at first glance, they seem to imply the same thing: the right to buy or sell shares of a particular stock. But there are also important differences between these two contracts that investors should be aware of.

Similarities

Warrants and options both offer investors an opportunity to benefit from movements in a stock’s price, though options can be traded without exercising while warrants typically require exercising to acquire shares.

With both warrants and options, the investor must exercise the contract to actually acquire shares. Both have specific guidelines with regard to the price at which investors can purchase (or sell, in the case of puts) their shares and the deadline for exercising them.

Warrants and options are both speculative in nature, since investors are essentially making a directional bet on which way the underlying asset’s price may move. Neither instrument provides voting rights or dividend payments prior to exercise. Investors can use different strategies when trading options or exercising warrants to potentially improve profitability while attempting to reduce losses.

Differences

Warrants and options also have important differences. While companies issue stock warrants, traders typically buy and sell options with each other directly. Warrants create new shares when exercised, which can result in dilution. Exchange-traded stock options generally do not create new shares, aside from employee stock options, which are basically a type of call option that, when exercised, can also dilute existing shares by increasing the total amount.

When investors exercise a warrant, they receive the stock directly from the company, while options are typically settled between traders.

💡 Quick Tip: Options can be a cost-efficient way to place certain trades, because you typically purchase options contracts, not the underlying security. That said, options trading can be risky, and best done by those who are not entirely new to investing.

Stock Warrants vs Options: A Summary

Here’s a closer look at options vs. warrants.

Stock Warrants	Stock Options
Confers the right to purchase (or sell) shares of stock at a specified price on or before a specified date. Holders of the contract have the right, but not the obligation, to exercise the contract.	Confers the right to buy (or sell) shares of stock at a specified price on or before a specified date. Holders of the contract have the right, but not the obligation, to exercise the contract.
Warrants create new shares, which may result in dilution.	Options do not create new shares, so there’s no dilution (unless they are employee stock options).
Issued by the company directly to investors.	Issued by traders or market makers who write call or put options.
Original issue warrants are not listed on exchanges, but there is a secondary market for the securities.	Options can be traded on public exchanges alongside other securities.
Primarily used to raise capital for the company.	Traders can buy (or write) options to try to benefit from price movements.
Warrant holders may have a decade or more in which to exercise their right to buy shares.	Options tend to be shorter-term in nature, with expiration periods usually lasting anywhere from a few days up to 18 months.
Less commonly used in the U.S.	Options are regularly traded on public exchanges in the U.S.

Pros and Cons of Warrants

If you’re considering warrants versus options, it’s helpful to understand the advantages and disadvantages of each.

Stock warrants can offer both advantages and disadvantages to investors. Whether or not it makes sense to include stock warrants in a portfolio can depend on your individual goals, time horizon for investing and risk tolerance. Warrants are also considered geared instruments, meaning small moves in the underlying stock can produce amplified gains or losses. This leverage may increase risk.

Stock Warrant Pros	Stock Warrant Cons
Warrant holders have the right to purchase (or sell) shares of stock, but are not required to do so.	Price volatility can diminish the value of stock warrants over time.
Stocks may be offered to investors at a premium relative to the current market price.	When warrants are exercised, new shares are issued, which may result in dilution.

Pros and Cons of Options

As with stock warrants, trading options has both upsides and potential downsides. Beginning traders should have a thorough grasp of the essentials, prior to trading, to understand the complexities and risks involved. Here are some of the key points to know about trading options.

Stock Option Pros	Stock Option Cons
Options may amplify gains compared to trading in individual shares of stock.	Stock options are more sensitive to volatility which can mean higher risk for investors.
May be suited to active day traders who are hoping to capitalize on short-term price movements.	Frequent options trades can mean paying more in commissions, detracting from overall returns.
Traders can use options as a hedging tool to manage risk in uncertain market environments.	Time value decays the value of options over time.

The Takeaway

Understanding the difference between options and warrants matters if you’re considering either of these types of securities. While the language of stock warrants may sound similar to some of the terms used in options trading, these are in fact two different instruments.

Companies issue stock warrants primarily to raise capital, whereas traders typically buy and sell options with each other directly. Warrants create new shares of companies, while options do not typically cause any dilution.

SoFi’s options trading platform offers qualified investors the flexibility to pursue income generation, manage risk, and use advanced trading strategies. Investors may buy put and call options or sell covered calls and cash-secured puts to speculate on the price movements of stocks, all through a simple, intuitive interface.

With SoFi Invest® online options trading, there are no contract fees and no commissions. Plus, SoFi offers educational support — including in-app coaching resources, real-time pricing, and other tools to help you make informed decisions, based on your tolerance for risk.

Explore SoFi’s user-friendly options trading platform.

FAQ

Is a warrant the same thing as an option?

No. Warrants and options are not the same thing. Companies issue stock warrants to give investors the right to buy shares of stock at a specified price on a specified date. Stock warrants may allow investors to purchase shares of stock at a premium, while providing a longer window in which to decide whether to exercise the warrant.

Options are derivatives contracts that give buyers the right, but not the obligation to buy (in the case of a call) or sell (in the case of a put) an asset at a specific price within a certain period of time.

Can warrants exist in a SPAC?

Yes. A Special Purpose Acquisition Company (SPAC) is typically created for the purpose of acquiring or merging with an existing company. This type of arrangement may enable private companies to circumvent the traditional IPO process. A SPAC may use warrants to raise capital from investors. These warrants are generally good for up to five years following the completion of a merger or acquisition.

Why would you buy stock warrants?

Stock warrants may appeal to some investors seeking speculative exposure at a lower upfront cost than purchasing shares outright. Warrants offer the right, but not the obligation, to buy stock at a set price in the future, and this can be attractive if the stock’s price rises. Warrants may expire worthless if the share price does not exceed the strike price, however. They are generally considered higher-risk instruments and are not commonly used in traditional portfolios.

Can I sell my stock warrants?

Some stock warrants are transferable, and may be sold on a secondary market. This depends on the issuing company and the terms of the warrant terms. Liquidity can vary: while exchange-listed warrants may be easier to sell, others may have limited or no market activity. It’s important to check the specific warrant agreement to understand whether the security is tradable and what restrictions might apply.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

Photo credit: iStock/Inside Creative House

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q325-016

Sep

2025

What Are Power Hour Stocks? What to Know When Trading

Power Hour Stocks: What Are They and How Do You Trade Them?

By Brian O'Connell | Growing Wealth, invest, Investing | Comments Off

Table of Contents

What Is the Stock Market Power Hour?
When Does Stock Power Hour Occur?
Red Flags and Triggers to Look for During Power Hour Trading
FAQ

The power hour is a period of active trading, high volume, and volatility that tends to occur when the market opens and again when it closes. Many short-term traders find the power hour appealing because of the trading opportunities it presents.

Power hour trading generally isn’t as compelling to buy-and-hold and longer-term investors, as these short-term trades come with much higher risk exposure, despite the opportunity for gains.

Key Points

• The “power hour” refers to periods of high trading activity, volume, and volatility typically at the market’s open and close.

• While appealing to short-term traders, power hour trading carries more risk for longer-term investors.

• The first hour of trading is active due to reactions to overnight news, while the last hour sees increased activity as traders look to close positions or capitalize on heightened selling.

• Triggers for intense power hour trading include earnings reports, news about “daily gainers,” major economic news, and quarterly triple witching hour events.

• Due to increased volatility and risk, it is advisable for investors unfamiliar with choppy markets to avoid power hour trading.

What Is the Stock Market Power Hour?

During the trading day, the power hour is when traders have a concentrated time to leverage specific market opportunities. That goes for anyone trading common market securities like stocks, index funds, commodities, currencies, and derivatives, especially options trading and futures.

The power hour period typically occurs when the market opens at 9:30am ET and lasts until approximately 10:30am. Some traders identify a second power hour at the end of the day: roughly 3:30pm to 4:30pm, when the market closes.

The heightened activity during these periods comes from a confluence of factors.

• Traders digest recent news and upcoming events.

• They place new trades and look for opportunities.

• The combined activity can create short-term price volatility that some traders can take advantage of.

When Does Stock Power Hour Occur?

The term power hour is subjective, but most market observers land on two specific times in defining the term:

• The first trading hour of the market day. This is when news flows in overnight from across the world that can impact portfolio positions that investors may want to leverage, when investing online or using a brokerage.

• The last hour of the trading day. This is when sellers may be anxious to close a position for the day, and buyers trading stocks may be in a position to pounce and buy low when selling activity is high.

One commonality between the first hour of a stock market trading session and the last hour is that trading volatility tends to be higher than it is during the middle of a normal trading day. That’s primarily because traders are looking to buy or sell when demand for trading is robust, and that usually happens at or near the market opening or the market close.

Each power hour brings something different to the table, when it comes to potential investing opportunities.

Recommended: Stock Trading Basics

Power Hour Start of Day

The first hour of any trading session tends to be the most active, as traders react to overnight news and data numbers and stake out advantageous positions.

For example, an investor may have watched financial or business news the previous night, and is now reacting to a story, interview, or prediction.

Some traders refer to this scenario as “stupid money” trading, as conventional wisdom holds that one news event or headline shouldn’t sway an investor from a strategy-guided long-term investment position. The fact is, by the time the average investor reacts to overnight data, it’s likely the chance for profit is already gone.

Here’s why: Most professional day traders were likely already aware of the news, and have already priced that information into their portfolios. As the price goes up on a stock based on artificial demand, the professional traders typically step in and take the other side of the trade, knowing that in the long run, investing money will drift back to the original trade price for the stock and the professional investor will likely end up making money.

Power Hour End of Day

The last hour of the trading day may also come with high market volatility, which tends to generate more stock trading. Many professional traders tend to trade actively in the morning session and step back during mid-day trading, when volatility is lower and the market is quieter than in the first and last hours of the day.

Regular traders can perk up at the last hour of trading, where trading is typically more frequent and the size of trades generally climb as more buyers and sellers engage before the trading session closes out. Just as in the first hour of the trading day, amateur investors tend to wade into the markets, buying and selling on the day’s news.

That activity can attract bigger, more seasoned traders who may be looking to take advantage of ill-considered positions by average investors, which increases market trading toward the close.

Recommended: 7 Day Trading Strategies for Beginners

Red Flags and Triggers to Look for During Power Hour Trading

For any investor looking to gain an advantage during power hour trading, the idea is to look for specific market news that can spike market activity and heighten the chances of making a profit in the stock market.

These “triggers” may signal an imminent power hour market period, when trading can grow more volatile.

Any Earnings Report

Publicly-traded companies are obligated to release company earnings on a quarterly basis. When larger companies release earnings, the news has a tendency to move the financial markets. Depending on whether the earnings news comes in the morning or after hours, investors can typically expect higher trading to follow. That could lead to heavier power hour trading.

News on Big “Daily Gainers”

Stock market trading activity can grow more intense when specific economic or company news pushes a single large stock — or stock sector — into volatile trading territory.

For instance, if a technology company X announces a new product release, investors may want to pounce and buy that tech stock, hoping for a significant share price uptick. That can lead to higher volume trading stock X, making the company and the market more volatile (especially later in the day), thus ensuring an active power hour trading time.

Reserve/Economic News

Major economic news, like jobs reports, consumer sentiment, inflation rates, and gross domestic product (GDP) reports, are released in the morning. Big news from the Federal Reserve typically comes later in the day, after a key speech by a Fed officer or news of an interest rate move after a Fed Open Markets Committee meeting.

Make no mistake, news on both fronts can be big market movers, and can lead to even more powerful power hour trading sessions.

Anticipation of huge economic news, like a Federal Reserve interest rate hike or the release of the U.S. government’s monthly non-farm labor report, can move markets before the actual news is released, potentially fueling an even larger trading surge after the news is released, either at the open (for government economic news) or at the end of the trading day (for Federal Reserve news).

Triple Witching Hour Events

Quarterly triple witching hours — when stock options, futures and index contracts expire on four separate Fridays during the year — historically have had a substantial impact on market activity on those Friday afternoons, in advance of the contracts expiring at the days’ end.

When options contracts involving larger companies expire, market activity on a Friday afternoon prior to closing can be especially volatile. Thus, any late afternoon power hour on a triple-witching-hour Friday can be highly active, and may be one of the largest drivers of power hour trading during the year.

The Takeaway

The concept of a stock market “power hour” is based on the increased activity at certain times of day — typically the market’s open and close. While the power hour presents opportunities for some traders, others may find it risky.

Consequently, it’s a good idea to give power hours a wide berth if you’re not familiar with trading in choppy markets, where the risk of losing money is high when power trading activity is at its highest.

Invest with as little as $5 with a SoFi Active Investing account.

FAQ

Is the power hour a good time to trade?

For sophisticated short-term traders, trading power hour stocks can be advantageous. The heightened market activity often presents a number of opportunities. For those less skilled at maximizing these short windows of opportunity, power hour trading can be highly risky.

Is the power hour more volatile?

Yes, the hallmark of the power hour, whether at the market’s open or close, is its volatility. In short, the power hour is a high-risk time in the market for most ordinary investors.

Can you make money during the power hour?

It’s possible to make money during the power hour, assuming you have the skill and the strategies to seize the opportunities presented by short-term price movements.

Photo credit: iStock/Tatiana Sviridova

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q325-089

Sep

2025

A man in a plaid shirt and watch connects wires to a row of glowing blue computer components.

Is Crypto Mining Still Worth It in 2025?

By Brian Nibley | Growing Wealth, Investing | Comments Off

Table of Contents

The State of Crypto Mining in 2025
Is Crypto Mining Profitable?
Best Cryptocurrencies to Mine in 2025
Risks and Alternatives for the Crypto Miner
FAQ

Crypto mining can still be profitable, but it’s potentially not as profitable for some as it was in years past. That’s true for a number of reasons. Cryptocurrencies by and large still have value, but calculating the potential for miner profitability can be a bit trickier than before, given the expense of computer hardware and software needed today, as well as the rising cost of energy it takes to keep that mining equipment running. Crypto miners must simultaneously contend with increased competition, along with potentially diminishing rewards.

That said, knowing the factors and expenses involved can help you determine if crypto mining may be a good option for you. Before deciding whether mining Bitcoin, Litecoin, Ethereum Classic, or other cryptocurrencies is worth it, it’s important to know how it works, and what the pros and cons are.

Key Points

• High competition, higher costs, and potentially smaller rewards are some of the challenges miners face today.

• Mining requires specialized, expensive equipment and significant energy.

• Alternatives include joining a mining pool or cloud mining service, though it’s important to vet options for legitimacy.

• Environmental pollution from high electricity consumption is a major concern.

• Miners must remain aware of new regulatory changes and security risks.

🛈 While SoFi members may be able to buy, sell, and hold a selection of cryptocurrencies, such as Bitcoin, Solana, and Ethereum, other cryptocurrencies mentioned may not be offered by SoFi.

The State of Crypto Mining in 2025

Crypto mining is, as of 2025, still very much an active part of the overall crypto ecosystem. But given how popular cryptocurrency and blockchain technology has become in recent years, it’s more competitive than ever, and the rewards for mining certain cryptocurrencies have dwindled.

What Is Crypto Mining?

Crypto mining is the system used by some blockchain networks to validate and secure transactions or data, while simultaneously producing rewards and new cryptocurrencies for miners, or participants on the network. As such, it simultaneously validates the network and expands it.

Crypto mining isn’t just the creation of new cryptocurrencies, like Bitcoin (BTC), which is the first, largest, and most well-known cryptocurrency that utilizes a proof-of-work validation system. It’s also a decentralized global system by which miners validate and secure cryptocurrency transactions, and earn coins themselves. But note that there are many others, such as Litecoin, Ethereum Classic, Dogecoin, and more.

It goes back to the blockchain technology that cryptocurrencies are built on. To run these networks, miners rely on powerful computer systems, or in some cases cloud-based technology, to solve complex mathematical puzzles and validate blocks of digital transactions.

This system is known as proof-of-work (PoW). Under PoW systems, every transaction gets recorded in a transparent, immutable, public ledger known as the blockchain. The miners who solved it get rewarded with new coins being mined.

Overall, mining serves the purpose of validating a crypto network, and generating rewards for network participants, sometimes called validators or miners.

How Major Events Have Reshaped the Industry

Regulatory changes, and potential technology changes, have spurred the industry to some extent. While there are still a lot of things up in the air, legislative changes in 2025 appear to be more crypto-friendly than in previous years.

At the same time, rewards for some cryptos, particularly Bitcoin, have diminished. That’s largely due to a phenomenon introduced with Bitcoin known as the “halving,” which cuts the number of coins rewarded for mining a new block by half.

Bitcoin mining is intensely competitive, especially because the reward is halved every 210,000 blocks and now stands at 3.125 BTC, down from 6.25 BTC. At Bitcoin’s first halving event in 2012, its reward was reduced from 50 to 25 BTC. As more Bitcoins are mined and the supply of new Bitcoins drops, the amount of Bitcoins released with every new block diminishes over time. The supply will purportedly be exhausted by around 2140^[1].

While Bitcoin’s halving event is likely the most significant in the crypto sector, given its relative (though volatile) value and reach, a few other cryptocurrencies use halving as well. Litecoin rewards are currently 6.25 coins per block, having last been reduced in August 2023. Litecoin gets halved every 840,000 blocks and is scheduled to produce 84 million coins, compared to Bitcoin’s 21 million.^[2]

Ethereum Classic, established as the original Ethereum blockchain code following a 2016 fork that split the blockchain into Ethereum (ETH) and Ethereum Classic (ETC), uses an event called the “fifthening,” which lowers the block rewards by one-fifth, or 20%, every five million blocks.^[3]

What Real Miners Are Saying

In a general sense, overall sentiment around the crypto industry is that it may still worth it to mine crypto, assuming you have the correct equipment, know what you’re getting into, and have access to relatively inexpensive electricity.

Again, it’s more competitive, and rewards are diminishing, so it’s not quite as simple, easy, or necessarily as profitable as it once was.

Is Crypto Mining Profitable?

As noted, crypto mining can still be profitable. But it isn’t for everyone. There are a lot of things to take into consideration.

The Unavoidable Costs

If you plan to try crypto mining on your own, here are some things to consider:

• Equipment cost

• Electricity cost

• The time it will take to recoup equipment costs

• How BTC price fluctuations (or that of other crypto) might impact profitability

• The frequency with which you will need to buy newer, more powerful machines and sell old ones

There may be additional things to consider, too, but this is an initial list to consider.

How to Calculate Your Potential ROI

To determine your potential returns from crypto mining, you’ll need to first assess how much income you may be able to generate from mining a specific cryptocurrency.

The rewards you could potentially earn from mining different cryptocurrencies can vary dramatically. Bitcoin miners that successfully validate a new block on Bitcoin’s blockchain will earn 3.125 BTC, currently. As mentioned above, that reward will be reduced during the next halving, and be aware that it is very unlikely for an individual to mine a single Bitcoin on their own, given the vast computational power required.

Rewards for other proof-of-work cryptocurrencies may also change over time, as with Litecoin and Ethereum Classic. Similar to Bitcoin mining, altcoin miners may be most successful when working in teams or mining pools — groups that combine their computer power to mine collaboratively — though keep in mind that rewards are split up between parties.

For every PoW cryptocurrency you may be interested in mining, you’ll also need to know how much you’ll spend on mining equipment, and how much you’re paying for electricity to get a sense of a potential return on your money. That will vary depending on many factors. But with those figures in-hand, you can make an educated guess as to how much crypto rewards you could actually mine for a given cryptocurrency, and then calculate a potential return.

Best Cryptocurrencies to Mine in 2025

For those who choose to undertake the potentially costly task of mining crypto, the best cryptocurrency to mine might be the one with the lowest difficulty and highest price. But it’s critical to remember that these dynamics are in a constant state of flux, so the best cryptocurrency to mine today might not be the best one to mine tomorrow.

Mining Bitcoin: A Game for Giants

While Bitcoin mining may seem lucrative given its popularity and relative value to other cryptocurrencies, there are some caveats. For instance, to mine crypto effectively and efficiently, specialized machines built and tuned specifically to mine cryptocurrencies are often required. It also requires space, and a great deal of energy, to house and cool these powerful machines that operate around the clock.

There’s also competition to consider: The mining market is dominated by large companies who secure large warehouse facilities to house their army of mining rigs. Some of these companies might run mining pools that smaller miners can contribute to in order to get a piece of some block rewards in exchange for a small fee.

This is all to say that, today, mining Bitcoin, as an individual, is rarely profitable unless someone has access to extra low-cost electricity and affordable equipment. Industrial crypto mining exists, and it’s hard to compete with their large-scale mining operations.

Top Altcoins for GPU Mining

As noted, aside from Bitcoin, there are numerous altcoins and other cryptocurrencies that can potentially be mined. GPU mining, which stands for “graphics processing units,” involves using GPUs, rather than CPUs, to process mining calculations, and they’re generally more efficient at it.

With that in mind, there are many altcoins that users can consider mining with their GPU-equipped mining rigs:

Ethereum Classic (ETC): Unlike Ethereum, which moved to a proof-of-stake consensus mechanism, Ethereum Classic still uses proof-of-work, and may be mined using GPU or ASICs hardware.

Litecoin (LTC): Initially launched in 2011 as a decentralized global payment network and “a lite version of Bitcoin,” it was designed to be faster as well as more lightweight, but its adoption has been slower than Bitcoins’. Litecoin may be mined using high-end GPUs as well as ASICs, though working in a pool may be most viable.

Dogecoin (DOGE): While mining of the popular memecoin may be most effective using an ASICs system, it’s still possible to mine Dogecoin using a powerful GPU system.

Ravencoin (RVN): Ravencoin, a fork of the Bitcoin code used to issue and exchange tokens, is actually designed so that mining is most efficient on consumer GPU systems — and resistant to ASICs systems — thanks to an algorithm it uses called KAWPOW.

In addition to GPU options, there are also still CPU-mineable coins on the market, too, which means they can be mined using a CPU, rather than a GPU or a more advanced rig. Some coins are designed primarily for CPU mining, though these are less common. GPUs generally have more processing power than CPUs, which is why more miners may want to use GPU-equipped rigs to mine. And many cryptos can be mined with either.

Risks and Alternatives for the Crypto Miner

While there are risks associated with mining, an alternative for some people may be to join a crypto mining pool. These also have costs and risks, but may be a less-risky option for some.

As for a primer: Due to the high cost and rising difficulty of mining crypto, most miners today use something called a mining pool, as mentioned previously. Participating in mining pools is considered by many to be the only way for individual miners to make any profit today, and even then it can be difficult to recoup the costs of equipment and electricity.

Within a mining pool, individual miners pool their resources together with other miners, improving their chances of mining a block and earning the rewards. When a block gets mined, the rewards are then split up among the different miners in proportion to the amount of computing power (known as hashing power) they contributed.

Mining pool owners typically charge mining fees for maintaining and participating in the pool. There are several different pools to choose from, each with their own structure.

Further, there are also cloud mining opportunities out there, which effectively allow miners to use computing resources over the internet. Miners using this strategy are renting others’ equipment, which incurs more costs. However, it’s important to vet a cloud mining platform to ensure they’re legitimate and well-reputed, as scams in this sector are an unfortunate reality.

The Major Risks Beyond Profitability

While crypto mining can be profitable in some instances, it does have its risks and downsides. Here’s a brief rundown.

• Environmental Risks: As mentioned, crypto mining is resource-intensive. Running mining rigs eats up a lot of electricity, which, in turn, generates environmental pollution.

• Security Risks: Malware and other security risks exist in the mining sphere, too. For instance, it’s possible that bad actors could use techniques (like phishing) to access someone’s computer, and then load mining codes and programs onto it without them knowing. As such, the victim could be sharing their computing resources and electricity mining with a hacker without even realizing it.

• Regulatory Risks: There are new regulations affecting the crypto space (such as the Genius Act and rules around the national Bitcoin Reserve). There are likely to be more in the future. The point is that the rules and regulations surrounding crypto are in flux, and those new rules and regulations will likely affect miners.

• Financial Risk: Crypto mining requires upfront costs, which can be substantial. You’ll need to buy a “rig,” first and foremost, and stocking up on the necessary computer power can be expensive. As with any financial plan, there are no guarantees the money you put in will pay off. Mining may not be as profitable in the future, meaning you may not see the types of returns you were hoping for longer-term.

Is Mining a Better Option Than Buying Crypto?

Whether or not mining or buying crypto is a better financial option depends on a number of factors, such as your resources, technical skills, tolerance for risk, and timeframe.

To a large extent, it comes down to how much you plan to spend on mining equipment. And it’s important to remember that the hardware needs of crypto mining is constantly evolving as older machines become obsolete, meaning that you need more processing power over time to produce the same potential results. When this happens, miners must acquire new, more advanced hardware.

In that sense, it may make sense for those without the capital and time to devote to mining to simply buy crypto directly. Keep in mind that another alternative individuals could consider is staking vs. mining crypto in order to pursue rewards.

The Takeaway

Crypto mining is still profitable in 2025 however, it may not be as profitable as it once was, and that mining operations have become more expensive to run and maintain. That’s not to say that prospective miners won’t make a profit, but there are more things to consider than in years past.

With that in mind, mining is a complex operation that carries considerable costs and risks.

SoFi Crypto is back. SoFi members can now buy, sell, and hold cryptocurrencies on a platform with the safeguards of a bank. Access 25+ cryptocurrencies, such as Bitcoin, Ethereum, and Solana, with the first national chartered bank to offer crypto trading. Now you can manage your banking, investing, borrowing, and crypto all in one place, giving you more control over your money.

Learn more about crypto trading with SoFi.

FAQ

Can I make a profit mining with just one GPU?

Possibly, but you should take into account the fact that you may spend more on a mining rig than you could see as a result of your mining efforts.

How long would it take to mine 1 Bitcoin?

There’s no single, correct answer as to how long it takes to mine a single Bitcoin in 2025. It all depends on the amount of hashing power a miner contributes, and a bit of luck. Bitcoin’s blockchain does produce one Bitcoin around every ten minutes, but for an individual miner, there’s no telling when they could receive the reward (since not all miners are rewarded when a block is validated).

How do I find out my exact electricity cost for mining?

To figure out how much you’re spending on electricity for crypto mining, you’ll need to know how much you’re paying for electricity in your specific area, and how much electricity you’re consuming specifically for mining. From there, you can calculate your exact costs, but it could still prove to be tricky.

Is cloud mining a legitimate alternative?

Cloud mining is a viable alternative to putting your money into a crypto mining rig, but know that any potential rewards will likewise be diluted. However, cloud mining scams are not uncommon, unfortunately. It’s important to thoroughly vet any service you’re considering.

Will my mining hardware become worthless in a year?

It’s possible that your mining hardware will lose value over the course of a year, and perhaps even likely.

About the author

Brian Nibley

Brian Nibley is a freelance writer, author, and investor who has been covering the cryptocurrency space since 2017. His work has appeared in publications such as MSN Money, Blockworks, Business Insider, Cointelegraph, Finance Magnates, and Newsweek. Read full bio.

Article Sources

Bitcoinblockhalf.com. Bitcoin Block Reward Halving Countdown.
Litecoin. The Cryptocurrency for Payments.
Ethereum Classic. Ethereum Classic Course: 8. Ethereum Classic’s Monetary Policy.

Photo credit: iStock/South_agency

CRYPTOCURRENCY AND OTHER DIGITAL ASSETS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

Cryptocurrency and other digital assets are highly speculative, involve significant risk, and may result in the complete loss of value. Cryptocurrency and other digital assets are not deposits, are not insured by the FDIC or SIPC, are not bank guaranteed, and may lose value.

All cryptocurrency transactions, once submitted to the blockchain, are final and irreversible. SoFi is not responsible for any failure or delay in processing a transaction resulting from factors beyond its reasonable control, including blockchain network congestion, protocol or network operations, or incorrect address information. Availability of specific digital assets, features, and services is subject to change and may be limited by applicable law and regulation.

SoFi Crypto products and services are offered by SoFi Bank, N.A., a national bank regulated by the Office of the Comptroller of the Currency. SoFi Bank does not provide investment, tax, or legal advice. Please refer to the SoFi Crypto account agreement for additional terms and conditions.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOCRYP-Q325-049

Investment Fees Explained: Definition, Types, Costs

What Are Investment Fees?

Why Are Investment Fees Charged?

Who Charges Investment Fees?

6 Common Types of Investment Fees

1. Management Fees

2. Hedge-fund Fees: Two and Twenty

3. Expense Ratio

4. Sales Charges

5. Advisory Fees

6. Brokerage Fees and Commissions

Cost of Investment Fees

Pros and Cons of Investment Fees

How Much Is Too High a Price To Invest?

The Takeaway

FAQ

What are typical investment fees?

Is a 1% management fee high?

How much should you pay for investment management fees?

Understanding the Different Stock Order Types

Stock Order Types Explained

Market Order

Limit Order

Stop Order

Stop-limit Order

Trailing Stop-Loss Order

Bracket Order (BO)

Timing Instructions

Day Orders

Market-on-Open (MOO) and Market-on-Close Orders (MOC)

Good ‘Til Canceled (GTC)

Immediate or Cancel (IOC)

Fill-Or-Kill (FOK)

All-Or-None (AON)

Which Order Type Is Best?

The Takeaway

FAQ

What is the safest type of stock order to use?

What is the difference between stop-loss vs stop-limit orders?

What is a standard stop-loss rule?

Comparing Stock Warrants vs Options

What Are Stock Warrants?

What Are Options?

Similarities and Differences Between Warrants and Options

Similarities

Differences

Stock Warrants vs Options: A Summary

Pros and Cons of Warrants

Pros and Cons of Options

The Takeaway

FAQ

Is a warrant the same thing as an option?

Can warrants exist in a SPAC?

Why would you buy stock warrants?

Can I sell my stock warrants?

Power Hour Stocks: What Are They and How Do You Trade Them?

What Is the Stock Market Power Hour?

When Does Stock Power Hour Occur?

Power Hour Start of Day

Power Hour End of Day

Red Flags and Triggers to Look for During Power Hour Trading

Any Earnings Report

News on Big “Daily Gainers”

Reserve/Economic News

Triple Witching Hour Events

The Takeaway

FAQ

Is the power hour a good time to trade?

Is the power hour more volatile?

Can you make money during the power hour?

Is Crypto Mining Still Worth It in 2025?

The State of Crypto Mining in 2025

What Is Crypto Mining?

How Major Events Have Reshaped the Industry

What Real Miners Are Saying

Crypto is back at SoFi.

SoFi Crypto is the first and only national chartered bank where retail customers can buy, sell, and hold 25+ cryptocurrencies.

Is Crypto Mining Profitable?

The Unavoidable Costs

How to Calculate Your Potential ROI

Crypto is
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