Why you'd see a difference between the price in the app vs. on a site like Google Finance & what you pay

Any chance that 0.5% SDRT was included in the 0.7% spread? Then 0.2% seems more reasonable fluctuation between when you hit ā€œbuyā€ and the execution.

Bear in mind it is only my assumption, Freetrade support will be more competent in helping you with this issue.

Nothing to do with SDRT as far as I can tell, happy to be proven wrong but hereā€™s the screenshot below of the public trades at the same time. Does it look odd?

Just noticed that it is Metro Bank in question. What exactly is the surprise? 0.639% difference in share value with a 36 seconds gap.

Slightly later you see the price going from 578.31 to 575.50 in 22 seconds, thus making a 0.488% difference, which is comparable.

That said, I would understand your concerns if you had significant spreads when another [similar size] transaction was made a second or two before/after yours. In your screenshot 11:18:46 is a good example of that scenario.

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I take your point and I can live with minor fluctuations but 0.639% is way too big IMO, even for a volatile Metro Bank. The larger trades in this list should be moving the price more than my little one and yet they arenā€™t, so something feels off to me.

Thanks for the responses, itā€™s appreciated :+1:

Edit: My other point to Freetrade support was that getting a poor price is nothing to do with a ā€œday tradingā€ strategy. You should be getting the best price regardless of how long Iā€™ve held the shares.

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The market price will fluctuate, thatā€™s just the nature of the stock market. Iā€™d also recommend Chrisā€™ excellent post for more details about what to expect - Why you'd see a difference between the price in the app vs. on a site like Google Finance & what you pay - #15.

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Ok, so if this is a normal fluctuation then I look forward to the day I get a ~1% upward move on the execute price when selling. If/when that ever happens I will come back here and eat my proverbial hatā€¦

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I am now watching this topic and waiting for that to happen :wink:

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I also want to share my experiences on this topicā€¦

I started investing my ISA a couple of weeks ago, mainly in massive cap and highly liquid US tech stocks like Amazon, Shopify, NVIDIA, AMD and Intel.

For each trade I would see the initial ā€˜buyā€™ screen which shows the latest price, and then on ā€˜buy completeā€™ page I would see the amount I actually paid being higher than the quoted price.

Iā€™ve been trading for a number of years on Hargreaves Lansdown and IG and also do a bit of spread betting so have a fair amount of experience at this.

Iā€™ve now made 17 separate trades on Freetradeā€¦ and for all of them the price on the complete screen was higher than the previous screen. This debunks the whole ā€œthe price changed in the few seconds it took to process the tradeā€ argument, because Iā€™d expect some of those trades to come in cheaper (especially NVIDIA and Intel which I was buy as the price was dropping).

As Iā€™ve been making the trades Iā€™ve had IG open with the live prices, and I can see that the buy prices pretty much matches what Freetrade says on the first screen. But the price actually paid (complete screen) is about 1% higher.

What is the reason for this? Iā€™m assuming the FX charge is absorbed in the exchange rate Iā€™m paying so this isnā€™t the problem?

Iā€™ve now started screenshotting the before and after pages as this seems to be the only way of keeping a record. Hereā€™s one I did earlier today for uber -

As you can see the price went from $42.24 to $42.67 which is a 1% increase. The buy price I was quoted on the first screen should already include the spread, so the 1% extra has come from nowhere(?). For this trade it works out at about a $6 overpaymentā€¦ but if I made a Ā£1,000+ trade then Iā€™d be paying the same or more than sites like IG or Hargreaves Lansdown.

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As we mention at the bottom of every stockā€™s page, the prices thatā€™re quoted in the app are ā€˜indicativeā€™ which means that theyā€™re there to give you a rough sense of what the market price, rather than telling you exactly what youā€™ll pay when you place an order.

Thatā€™s why this ^ is not a reliable assumption to make.

When you place an order, we use the live market price & process the order based on our order execution policy. We always seek best execution for our customers, which is a requirement thatā€™s set for us by the regulator.

If you have any queries about the price that you paid for a specific order, please message us in the app and weā€™ll be happy to check on it for you.

Thereā€™s more details about how orders on Freetrade work here -

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This matches what I saw for my non-GOOGL shares. Without seeing USD buy price in the app, itā€™s currently hard to pinpoint the difference on FX or spread. I only had this difference for US stocks.

I think the point Iā€™m trying to make is that if your prices are always 1% higher then I have to factor that into my calculations. And if itā€™s due to market fluctuations then why are they 1% higher all the time and not ever lower?

I can literally open the Hargreaves Lansdown or IG quote windows at the same time as making a Freetrade trade and see the price they will give me, which is the same price as your initial estimate, except for these platforms itā€™s the actual price I will pay (as long as I execute within a few seconds). HL and IG charge around Ā£8-Ā£12 per deal, so for trades that cost about Ā£1,300 and above Iā€™m better off with them and not Freetrade.

Basically, Freetrade doesnā€™t feel like itā€™s free, itā€™s $1 in fees +1% extra spread.

Please correct me if Iā€™m wrong thoughā€¦ I want Freetrade to succeed and I invested in the funding round!

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Alex,

I (and iā€™m sure others) appreciate your timely responses and engagement with the community. However, t ā€˜it is just market fluctuationā€™ isnā€™t really a sufficient answer in this case. Iā€™m sure there is a perfectly logical answer to all this but we would like to know what it is.

I think we can trust your words that Freetrade doesnā€™t add a markup. However, if you are consistently (and therefore merely passing on) a bad price from your market makers then you might not have technically violated your best execution but still no one would use Freetrade for a big trade.

As iā€™ve stated before, if i were a market maker, i would have no incentive to show Freetradeā€™s clients a good price, knowing that it is all market orders and Freetradeā€™s users will take any price given. This is why control is very important and keep your market markers on their toes. It is like having a sh!t supplier.

A lot of people might say ā€˜who cares about 1%ā€™. But thatā€™s exactly whatā€™s gonna bring Freetrade to the next level. As much as it is good for people to invest with no min, you cannot build a business off of even 1MM people buying Ā£5 each in 1000s different stocks a year iā€™m sorry. You need people to put their serious saving here. And currently if you have a decent amount to buy a stock, it does make a different between paying HL Ā£10 a trade to get a good price vs paying Freetrade nothing but consistently getting charged 1% more (and fearing that it could be even more).

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If you believe itā€™s always 1% then youā€™re going to have to always make trades over Ā£1000 to make HL a better option.

Theyā€™ve given you an answer complete with blogs. Not sure what else you want

ok i shouldā€™ve expanded. Several people complained about getting bad prices. The users provided (or at least suggested) evidence of live (executable) prices they were seeing in other platforms. As Alex said, Freetrade uses a third party to gather this information so you should be able to see 1, the mid market at the time of exection and 2, the bid/offer spread for trades executed around that time.

The mid market can move constantly (not by that much second by second but this is why you see price flashing on a live price screen) but spread normally does not move seconds by seconds unless there is a market moving event (macro or company news or big trade in either direction leaving the dealer ā€˜axedā€™ a certain way).

The question here is - did mid/market move or did the users get charged way more than they would through another platform.

yes that is correct but you donā€™t want Freetrade to become the go-to only for tiny tiny trades eitherā€¦

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Thereā€™s a lot of misinformation in this thread so hard to address it all.

To be clear, if you place and order for an LSE-listed stock or ETF it is going to be filled by the exact same network of market makers (aka Retail Service Providers or RSPs) that almost every other retail stockbroker in the UK uses. That includes Hargreaves Lansdown, Interactive Investor, Barclays and AJ Bell.

Any suggestion that we are adding a ā€œmarkupā€ or ā€œadditional spreadā€ is categorically false.

For instant trades we automatically execute the order with the market maker that comes back with the best price the fastest. Legacy stockbrokers typically add another step to show the quote for a certain amount of time and ask the user to then accept or reject it. We wonā€™t automatically execute an order unless the quote given is inside the bid-ask spread observable on the LSE order book - this sometimes causes rejected orders if market makers arenā€™t giving quotes that meet our requirements for best execution.

Orders for US-listed stocks are a bit different because we currently send those orders to the same LSE market makers, who also make a market in some US stocks. They provide quotes in GBP, so there is an FX conversion baked into the price we get for our customers. The underlying USD quote needs to be within what is called NBBO (Google it).

For US stocks, this will change once we turn on the new Investment Platform as weā€™ll start sending US orders directly to the States instead of LSE market makers (UK orders will stay over here of course). One benefit will be that we will do the FX conversion ourselves, so better FX rates than right now.

So again, we go out to the market to get the best price we can for our customers on all orders. We monitor best execution and do not make money in any hidden ways.

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This probably explains slight discrepancies users have referred to when buying US stocks, hopefully this mysterious platform will be available soon :slight_smile:

cc @spiralstatic

We wonā€™t automatically execute an order unless the quote given is inside the bid-ask spread observable on the LSE order book - this sometimes causes rejected orders if market makers arenā€™t giving quotes that meet our requirements for best execution.

I appreciate this clarification as it does address my concern that your market makers might be sending you bad prices.

Thanks Freetrade team!

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To follow up, I calculated the spreads from my 12 market order trades (taking into account 0.45% for FX).
The spread for my GBP trades was practically 0 as mentioned before (highest was 0.008% :ok_hand:t2:).
The actual spread for my USD trades ranged from 0 to 0.14% with an average of 0.04%, which is as close to 0 as I want it to be :slight_smile:

Thanks everyone for taking the time to explain this in detail!
Still looking forward to seeing the actual currency buy price (next to GBP buy price) and being able to place limit orders :wink:

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Iā€™m bringing this up again because I bought Apple today, and maybe Iā€™m being thick but nothing above can explain the discrepancy. As with every US stock Iā€™ve bought, the numbers on my portfolio indicate Iā€™ve made a loss of at least 1% immediately. It was well over that today, and thatā€™s taking the 0.45% exchange rate fee into account. Iā€™m not concerned about the price I bought at, but that itā€™s always, always at least an immediate loss of 1% or so. Why? If it was price fluctuations and/or exchange rate changes you would see it go up and down, not always hugely down. Seeing the purchase price in $ would help - why is this not available?

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