Kind of grasp it.
So if i wanted to buy Apple shares for example, in the morning and they are trading at $190 and i put in a order for $191 and the closing price is $210 what would be my purchase price?
Same for if they close at $170 after put in my order?
Does the basic model apply the same as on ISA, just there a £3 fee p/m for the ISA
Instant trades for a ISA will be £1?
You are spot on, it will be the market close price - either $210 or $170 as per your example.
Bear in mind the US stocks will not be available on launch, they will be added shortly after the release (few weeks/months potentially - no certain date yet).
Yes, hence if you want to invest without ISA, your investing experience can be free for life (except the stamp duty and capital gains tax). But at some point ISA becomes more cost-effective than GIA, and a flat £3 charge is quite enticing in comparison to the % other brokers charge.
Yes, unless you are on Alpha, for which the US instant trades will be free and for the UK they will be at 50p (but Freetrade are also looking to reducing this figure)
Ok for sums < 20k.
ETA : and only if you’ve haven’t already contributed to a S&S ISA this tax year.
There’s a couple of restrictions to contend with. First of all, if you’ve paid into a Stocks & Shares ISA this tax year then you cannot open another one until next April. Second of all, anything you withdraw from previous years’ Stocks and Shares ISAs and deposit into a Freetrade ISA will lose its protection and count towards your £20k limit this year.
Large amounts are probably best left until we support transfers - we know this is critical.
Edit: by all means open a new ISA with us when it’s ready and utilise this year’s allowance, but the above is in the context of transferring old ISAs instead of withdrawing them.
2 posts were split to a new topic: Fractional shares (US)
Would be handy if this was available this tax year for obvious reasons.Think this will be a huge selling point for Freetrade, blows all the other S&S ISA deals out the water
Hi. New user but longtime lurker.
Just want to say how much I appreciate what you guys are doing. So excited for you to get the ISA up and running. Only £3 a month is incredible compared to the increasingly large fees I pay HL.
I originally discovered Freetrade when searching for somewhere in the UK that does fractional shares as I invest almost exclusively in US shares. Having found you I thought ‘Great but they won’t do an ISA’ but you do! I then thought ‘yeah, but I bet trades and fees will be really expensive’. How wrong I was! You literally tick every box I have.
Like everyone else, I’m very impatient to finally get launched! Keep up the good work.
I understand the intention behind doing bulk trade at end of the day.
Wouldn’t that limit the stock universe to very liquid ones?
Also there is possibility of larger set of stocks for instant trading.
Hypothetically what would happen if Freetrade got lots of buy orders but no one is selling? Which might result in partly filled order, Would some of the orders cancelled? Lottery for bought shares?
Good question! The team explained that in one of their blog posts a while ago -
There’s a lot of text to quote but the key bit is:
But what if the sprout vendor doesn’t have enough sprouts to fulfil the original order?
Fear not, both have access to the magical electronic contract generating machine and have converted the original order into two parts — the one now fulfilled (let’s say 50% cash in exchange for 50% stock) and a new legally binding agreement to deliver the remainder at some future date.
As a Freetrade app user you know none of this as your portfolio already reflects everything you purchased and your cash has been debited.
This is purely an operational issue that the helper elves will manage on a daily basis behind the scenes until the sprout vendor has enough stock to deliver.
Oh & ..
For anyone that’s confused the sprout vendors were the market makers. The elf was the Freetrade app and staff. Sprouts are shares. The magic electronic legally binding contract machine was CREST.
That blog blows my mind and I’m not entirely sure what planet this dude is on but I think that blog is refering to post trade settlement rather than a tight/illiquid market at point of execution.
I’d imagine the answer to LittleFingers question is that if you aggregate trades then you’re likely firing it at the market on a fill or kill basis. Therefore it either executes entirely or fails entirely. In LittleFingers example I’d say the outcome is ‘fails entirely’ and no one gets their order. A ‘worked’ or ‘manual’ order would be a regulatory headache as one would/could fall outside the realm of best execution.
Lookin’ over the Freetrade universe data I’d say that orders will fail to execute on very minimal basis. If you check the Normal/Exchange Market Size for these stocks you’ll find they are huge.
I guess we could wait for one of Robs to give a definitive answer when they will have some time next week. I would think the exchange can handle pretty much any volume so pretty sure there should be no ‘fails’ unless for technical reason.
Not one to worry about early days.
But say you have an illquid stock with an EMS of 1000 , but Freetrades batch process pushed the Freetrade order to 10,000 then the electronic trade message would fail as the market makers would not take such a huge order via the RSP. They’d negotiate price. That becomes a voice/worked order. Non RSP trading could be an issue for adhering to best execution rules.
Exactly - we’re dealing in highly liquid stocks for the foreseeable. When we’re having to work aggregated trades through due to their size it’ll be a great problem to have.
Hi folks! I feel an ISA is the best way to go for me, but I’m wondering will I be able to move my existing shares into it that I already have on Freetrade? Will this be free or incur a cost?
HI - we’re working on a plan to allow people who onboard before we offer ISAs to transfer their portfolios into one. It’s quite complicated operationally, but we’ll release more details when we have them. Please remember though you’ll only be able to do this if you don’t already have a stocks and shares ISA elsewhere for this tax year.
Here holding out for a S&S ISA (in this financial year), so it sounds like the plan is to release prior to April…but should us Android folk hold on given we have two release dependencies?
not related but any idea on how many active users on the app now?
I saw user #500-and-something post on here or twitter earlier, so somewhere north of there!
cheers mate, i’ll just have to be patient