Future Freetrade

Not sure if it’s already been asked and answered, but in the future when freetrade has a few million users… is it possible to handle orders once or twice a day on that scale?
If so, how will this kind of trading affect the market?

@Rat_au_van @vlad any insight?

Get voting!: Execute basic trades twice a day :smiley:

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So many hypotheticals to consider :grin:

If they have loads of basic trades per day it would mean the amount of people using instant trades (and therefore revenue) would reduce.2 seems more likely.

But if there’s millions buying or selling the same thing at the same moment it could impact the share prices

Tl;dr dunno, but it’ll be fun to find out :popcorn:

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after thinking about it for a while i see FT acting like one very powerful VC

this is assuming millions of people are using it, but i think that’ll be the case as previously a lot of people that are forward thinking and would simply didn’t have access

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also if access grows with apps like robinhood and freetrade etc. then it might give a boost to the markets of money previously sitting in savings accounts

I think that’s what dozens are attempting to do, just not in a way I’m comfortable with

It’s about normalising investing though. I’m sure Robinhood launching will be a big deal, which is good coz it’s publicity for investing in general. Once people see it as an alternative to saving then it’ll take off. I can’t save. I’m totally rubbish at it but I’ve found it easy to put money aside each month to invest :woman_shrugging:

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i get that, it’s nice to buy something physical
i always think of it as spend a fiver now or have £50 in 30 yrs time

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I think of it as shopping with a really good returns policy :grin:

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If Freetrade gets enough volume, they could create their own dark pool and avoid exchange fees so offer free instant trades?

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How would that make them money?

that’s a nice dream and dystopian future all wrapped into one :joy:

The same way they make money from users that only do basic trades at the moment? I’m sure there would be a benefit to having enough volume to trade off of the exchange.

Interesting point! I wonder whether FT’s bulk orders could have distorting effects on the market, however unintended, once it’s operating at such a scale.

On a not too dissimilar tangent, I’ve read that Degiro does some super shady stuff with its hedge fund to its own customers’ detriment. (Of course, I’m not saying FT would ever do such a thing!)

i don’t think that applies to FT as the one thing they’re trying to build quicker than the platform is trust.
did get me thinking about a freetrade investment fund though :yum:

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That probably already happens with basic trades, and just ownership being swapped.

Does Freetrade not make a profit from the left over money in people’s account. I think ive still got £2.88 in my GBP wallet which ive not invested. How many others have left over currency in thier accounts. Im sure Freetrade take this money invest it and make millions exactly how banks do and dont pay you interest on it.

They do, but it is very minimal, circa 1% (could be less) because they only invest in risk free assets (BoE’s treasuries).

Unlike with banks, people don’t store a lot of spare cash with brokers, hence it is unlikely to be a large chunk of Freetrade’s revenues.

That’s a good point, the buys and sells are happening at the exact same time everyday, so could be just a simple swap over when there’s volume on both sides.

I don’t know much about how this works, do exchanges have to be updated when a share changes hands off-exchange and would there still be any cost to Freetrade.

If they can make millions off my 98p then fair play to them

Afaik it’s not invested but just gathers interest as they’d need that money on hand in case a lot of people wanted to withdraw at the same time