Difference between quoted price & actual price

Has anyone experienced issues when buying or selling shares, that the share price quoted isn’t always the share price you get?

I’ve had two deals in the past 48hrs where the selling or buying share price quoted when I’ve confirmed the trade, has changed by between 3-6p 10 seconds later on completion and as a result I’ve lost £50-60!

I’ve raised the issue but was told that the selling or buying price is only a guide price and that in the seconds after pressing the confirm button, Freetrade go out to the market to get users the best possible deal. I’m really struggling to accept this explanation as it seems to be a cover up and simply wrong.

Thoughts please!

Yes it is so

I don’t believe this is a cover up. Prices do change by the second in liquid issues. Between the moment we get to see the latest price, not a quote, and the moment Freetrade closes the deal for us at least 10 seconds have passed:

  1. see the latest price;
  2. type number of shares to sell / type amount of cash to buy;
  3. press review order button;
  4. review order: you can see on this page the price is an estimate;
  5. press confirm order button;
  6. introduce passcode or use finger print.

The number of deals that could have been executed since the moment we first see the latest price to the moment the deal is closed ranges from 0 to the thousands. You can check the price movements by asking Google the share price and compare it with the estimate price you’re getting.

With limit orders this will no longer be an issue.

This happened to me before. In some cases I’ve got a worse price, in others I’ve got a better one.

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The price you are quoted is delayed by 15 minutes plus the delay with the actual Freetrade app refreshing. It is not a price that was valid a few seconds before you placed the order.

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Also in addition to the timing points already mentioned it’s worth noting with markets there isn’t a just single price, there are X units available at Y price.

For example there could be asks at:

500 units at £1.06
5,000 units at £1.07
50,000 units at £1.08

The quoted price may be £1.06 but if you try and buy 1000 units you aren’t going to get that price. So if you are buying large volumes there might not be sufficient liquidity (depending on the particular stock).

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I think I would rather a failed trade than execute at £50 lower than expected/advertised. Some control over the execution logic would be nice…or an order confirmation screen.

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This is a great suggestion and absolutely imperative… otherwise there is no transparency that what a trade has cost you is what Freetrade have paid themselves and the model is completely open to be abused… in what other industry or circumstance as a customer would you accept this?!

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Freetrade and the wider industry need to find a solution for this as it’s not acceptable. How can you buy something when you don’t know how much it’s going to cost?! Other industries, such as the gambling industry, have found a solution through their technology so why can’t the likes of Freetrade.

The solution is limit orders.

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Thanks for sharing… I don’t think we should accept this uncertainty though. With online gambling sites if the odds change after you’ve pressed confirm bet, they’ll notify you and give you the option of proceeding at the new price… so why can’t the likes of Freetrade offer this? Otherwise it’s just a lottery.

It’s called a Market Order, by definition you just get the market price. Worked Orders are the industry solution and these are available with Freetrade Plus.

You can either guarantee an order will execute with an uncertain price (market order) or guarantee a price but accept that it may not execute (limit order).

The only mechanism by which both can be guaranteed is by Freetrade taking on risk to offer a guaranteed VWAP, there are good reasons why Freetrade shouldn’t take on risk for orders.

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It depends how limit orders work.

If the mid price is used to trigger the order it may still execute at £50 off of the limit price. Is this how they work?

I suppose you could set the limit higher/lower to compensate.

I use other brokers apps to get a real time price, then I put in a free trade deal. This is good enough for the majority of the time. I use Hargreaves Lansdown to get a real time quote, on their phone app. It would appear that FT are not doing real time, but this is a price I dont mind paying for free trades.

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I am not beta testing, unfortunately. Would be great if the testers could share their experience. My point is that limit orders should be executed based on the live price and this limits greatly the slippage.

Thanks for sharing, I might follow your advice and do the same… I just hoped for a better and easier user experience when choosing to use Freetrade (perhaps naively) as I don’t believe for a moment that FT are not making money out of those making “free trades”.

Hmm… I would have thought the solution would be a better (and more transparent) user experience.

It’s a business matter first and UX second in this case. Live pricing has a cost.

Will you be willing to pay to see the live price?

Guess most of the users won’t.

With the growth in trading volumes FT might find a solution.

It’s a serious accusation without proof. From the very beginning they stand by their execution policy.

https://blog.freetrade.io/how-do-freetrades-orders-execute-5db0d35a8ea2

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I think Google shows live prices for FTSE based shares. I use it to view prices before buying or selling in FT and altough the price I get isn’t exactly what I see in Google, it’s been much closer than hitting buy/sell based on a 15 minute delay.

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Yes. I just lost £43 on a £1000 buy because they bought at 6p more than the quoted price and I gat 25 fewer shares. This isn’t a free trade, this is a scam. £43 “commission”.