Draper Esprit and AIM stocks

Thought AIM stocks were off the FT menu but I see Draper Esprit plc now available which is listed on AIM. So why this AIM stock and not others?

Problem with a lot of AIM stocks is the buy and sell price spread is often quite wide. So at the moment the price you are quoting me to sell the holding is 485p but the actual market sell price is 476p. The former is the buy price so inaccurate pricing data is being given on the platform so there is a risk of your clients making bad decisions based on the information provided.

We’re still adding to our stock universe and we’d like to keep adding AIM stocks, as long as they have sufficient liquidity. We also offer Fever Tree, Asos & Boohoo.com at the moment, from the AIM market.

The prices in the app are ‘indicative’ so they’re there to give a rough indication of the price and won’t necessarily be the price that you pay when your place an order. When you do, we use the live market price at the time. We display the ‘mid’ price in the app.

Feel free to ask if you have any more questions :slight_smile:

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I recently bought some AIM shares through Degiro, and afterwards I checked the transactions on the exchange itself. The market maker made 4% off my trade, which I thought was outrageous, but what can you do?

I don’t think there’s much that can be done except for taking extra care when investing in AIM stocks and perhaps thinking longer term

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I see the two good reasons for AIM stock as:

The long term growth potential. In which case the spread should become irrelevant as you should expect multiple times return or total loss.

The second reason is for Business Relief eg exempt from IHT after two years which is worth 40%. Which should make the transaction charges mute.

I am talking about the fact that incorrect info is being provided on the app. I am told that my Draper shares are worth 520p but if I actually sold them I would only get 502p. If I own 1000 shares the valuation given would be incorrect by £180

It’s pretty standard to use the Mid price for listed stocks. The market has two lists of unexecuted trade. One is buys and one is sells, everyone who wants to buy is prepared to pay less than everyone who wants to sell is willing to sell for. The mid price is in between the highest sell and lowest buy. As you said the spread is high on this type of stock.

If you sell at Best then you basically accept the highest prices of the existing unexecuted deals. If you do a limit order at the mid price instead you will just join the list of sellers in the unexecuted trade list. The mid price will shift down slightly or a lot as a result.

To show the bid price you would basically have to get a quote from the market for each stock. Which would only be valid for several seconds. I don’t know whether the exchange charges for quotes or what but I would think there is good reason why stockbroker web services don’t just do this as standard.

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