Instant orders share price and execution

Hi, I am thinking to try FT and have two questions.
I read the execution policy. There I found this line
‘You cannot cancel an Instant Order on account of it being executed as fast as possible after instruction’.

In the platform I currently use I would first see the price and be given some time to decide if I wish to proceed. Do I understand correctly that in FT you are shown a price, then you place an instant order which gets executed instantly, i.e. you can not cancel it? I am fine with this providing it is executed at the price displayed but my understanding from reading the forum is that the execution price can be different from the price displayed. Is it correct? If yes, can the execution price differ substantially?

My second question is about the prices for instant orders. Are they similar to other dealing platforms or are worse? Probably someone trading on FT and another platform can answer this.

Thanks

I don’t think anyone is “trading” on FT…

Can you expand? Do you mean I should use ‘invest’?

I have a LISA with HL. This is how they operate. I like that 15 seconds window.

Precisely. What is done is done. You can’t change it

Yes. The price displayed is indicative only.

Freetrade, like HL or Google Finance, shows prices with a 15 minutes delay. Hence the reason why the price displayed may be different from the execution price with Freetrade.

HL works around this 15 minutes delay by presenting a 15 second window with a final price, which is the only thing I prefer in HL versus Freetrade.

Freetrade offers limit orders for Plus accounts and we can get around the potential price difference by using limit orders. I do.

Speaking of Plus, Freetrade just announced a 3% interest on cash up to 4k

In my experience with instant orders with Freetrade I had:

a) trades with displayed before press buy/sell button being the same as the execution price

b) trades where the execution price was worse for me

c) trades where the execution price was better for me

Why are prices delayed? Because LSE charges for that data. And it’s extremely expensive.

Instant orders are free. No commission fee.

The costs we have when investing in LSE listed shares is the 0.5% stamp duty tax.

When we buy/sell shares in companies listed in the US we have to pay Forex 0.45% over spot rate.

Check the pricing page

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Raul, Thanks for your time and a comprehensive answer. I think I was not clear with my second question. I meant to ask if the price they would offer you for an instant order is similar to, for example the price offered by HL. Have you tried to compare those prices? Also if I have access to real time prices, would you say that the instant order price will be close to the real price? Thanks again.

HL £11.95 instant order/trade

Freetrade £0.00 instant order/trade

Stamp duty is a tax. The same for all transactions across all service providers

Forex HL spot rate + 1%

Forex Freetrade spot rate + 0.45%

Check Freetrade pricing page. Link in my previous post

I think the question is not on the transaction costs, but the actual price of the security.

This is basically a question of how good Freetrade’s execution is, the market is a competition with everyone trying to get the best price.

It’s really hard to say with certainty which would get the better price, but in general (especially for high liquidity stocks) the price would be the same, or very similar. The maximum deviation would be the spread which for most stocks will be extremely narrow (a few pence)

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Raul, I do not mean the share dealing costs, but the price they would give you to buy a certain share. E.g. HL can offer a buying price of 111 for a share while FT offers 115. HL price is better. I understand that the price the dealers offer you depend on the MMs they work with, so I was curious if FT prices are similar to other dealers or worse. Basically I was asking if after buying instantly on FT you checked the price HL would offer you. Thanks again.

Prices on execution are usually around what you’d expect. There’s multiple execution venues that Freetrade look to get a good price from.

I believe (correct me if I’m wrong) they’re required to get you a good price or not complete the order.

As @Cameron says there’s no one specific answer. The price you get is going to depend on demand, size of the trade, what venues are willing to offer among i imagine several other parameters. This is the same for all platforms

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Thanks Eden

Thanks Cameron

Sorry I misunderstood

I have nothing to add to what Eden and Cameron said

Thanks

They’re certainly required to get the best price that they can. I don’t know if it’s a regulatory requirement or optional but if the price offered is substatially worse than the estimate then they will reject the order.

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I don’t think they have to reject those orders (although I think it’s good that Freetrade does so). The best execution wording in MiFID II states that they must take all sufficient steps to obtain the best result, which admittedly leaves a bit of an open question about price vs speed, but it’s generally pretty robust.

This regulation should give investors a bit of peace of mind that the prices they get on different platforms should be pretty close.

For the specific example of HL and FT you can actually see they are mostly using the same execution venues, so should end up with the same price most of the time.

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Speak for yourself. I am.

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