Hi, I was wondering is there any specific reason to why the minimum order size is at £2? I personally would like it to be around £1 for a few reasons:
- Smaller Investment
- Dividend Reinvestment
- Easier rebalancing
I assume different people will want the minimum order size to be at different levels for their needs, but I think lowering the minimum order sizer from £2 to £1 will be a nice change and it helps the smaller portfolio use their spare money more. Thank you.
I’m sure someone can come in with a more detailed explanation but for a quick answer:
The minimum order used to be £1 before US fractionals were introduced earlier this year. Then the minimum was bumped to £2. I think think the explanation given then was it relates to an actual minimum order needing to be £1 in order to execute, so the minimum order is set to £2 in order to eliminate any risk of volatile FX fluctuations suddenly dropping the order value to under £1 during execution.
e.g. an order sent at the value of £2 might actually be executed at the price of ~£1.98 during volatile FX fluctuations, this avoids the instance where a £1 order would be executed at ~£0.99 - below the minimum order value.
That actually makes a lot of sense, thank you.
There actually was no minimum pre fractionals, I used to throw pennies into random stocks.
I wouldn’t have thought the £2 minimum would apply to dividend reinvestment, when that gets introduced
I assume you mean when auto dividend reinvestment/DRIP is added. If so, then based on @MJE’s explanation, it looks like it might be there as well.
I was thinking this would be a bulk order (or similar) for all clients and so would avoid that issue. This would be more efficient than individual trades
I just managed to place an order for 62p! When did this change? I like it as I can spend more of my loose change! Well done Freetrade!
Good spot. This is a welcome change, particularly with autoinvest seemingly around the corner.
I hold a few trusts that are sub-£2 a unit, so it’s nice to be able to put some extra pennies to work too.
Yeah got a few 1 pound divident stocks comes in handy
Seems like the new limit is £0.10. Nice.
I checked after seeing your comment and the message on the app seems to confirm that! Thank you for highlighting this!
I am surprised Freetrade didn’t communicate this as an improvement, at least in the forum. Praise the team for the change though.
It may be that it was required to fix something else and FT don’t really want users adding additional small transactions on their servers. They already struggle a bit with dividend payments!
It’s out of the bag now though. Sorry FT!