Average spread %?

Apologies if this has been asked before but I couldn’t find anything…

Is there a rule of thumb one can use for the average bid/ask spread percentage for (i) LSE-traded ETFs (ii) LSE-traded stocks (iii) NYSE/Nasdaq-traded stocks?

I ask because the existence of a bid/ask spread is effectively a transaction cost, similar to SDRT - but unlike SDRT it’s not very visible, and I want to be sure I’m properly keeping it in mind when deciding whether and when to trade.

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You can use sites of ADVFN for live prices, where you’re able to check the spread on the day. There is no bid / offer price in FT so you’re unable to check the spread within FT.

FT doesn’t make money on the spread, they have said they will try to get the best price possible. I look for stocks under 400bps you can use services such as Stockopedia to narrow down those stocks.

I would however like to see the bid / offer / spread within the FT UI.

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As an example, I looked for iShares Core FTSE 100 UCITS ETF (Dist) - ticker ISF on the London Stock Exchange.

I could find it on Yahoo! Finance:

But not on ADVFN, where I found similar listings but not that specific one. Am I making a n00b mistake?

Here you go…sometimes sites call things slightly different, but also keep a look out for the correct ticker and the exchange…

here you can see the ticket is ISF and the exchange is LSE…thats the one you want.

Ah, thanks. I actually saw that one, but since it didn’t say UCITS ETF in the name I thought it was something completely different.

So the bid/ask spread as a percentage in this case is around 0.03% - ie, an order of magnitude cheaper than SDRT on UK stocks. :slight_smile:

I wouldnt always say cheaper. It just requires less to move up and down.

Checked a couple more:

  • iShares EURO STOXX 50 UCITS ETF (Acc) (LSE/GBX): 0.1%
  • iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc) (LSE/GBX): 0.04%

So I’m going to take a stab and say the bid/ask spread on major LSE-traded ETFs is in the region of 0.02% to 0.1%.

At least, that is the case today.

I assume this is fairly constant over time, at least for ETFs - absent any trading spikes where you may get a better deal.

Most things in the FTSE100 or products traded frequently are very liquid therefore will generally always have a tight spread.

Yes, but I guess while both 0.02% and 0.04% would be considered tight spreads, one is double that of the other.

I am wondering if an ETF that has a bid/ask spread of 0.02% of mid today is likely to have that tomorrow and the next day too (give or take fluctuations in decimal places largely hidden in a rounding to 2dp). Ditto for an ETF with a bid/ask spread of 0.04% and so on.

I would say don’t look into spreads into much detail. Spreads will always change, they’re not consistently the same. They will always change here or there by a few basis points. Just don’t buy anything with a massive spread.

An ETF will generally always have a tight spread. So you won’t really need to worry about the spread that much. It’s not like you’re buying an AIM listed stock which could have a spread of 4000 bps.

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Other fintech apps offer the user a bid/ask price and give the user a short period of time to confirm the offer before it elapses. I’ve had a couple of situations where I have been quoted a price on FT and then the actual purchase price was about 5% different. I wouldn’t have accepted that spread given the choice and it screwed up my DCA on a couple of holdings. This is an obvious fundamental area that would enormously improve the UX.

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