Problems with Limit order execution

I set up a limit sell for £7.60 and they completed immediately for £7.61. I didn’t realise the spread would need be quite so large, it seemed to be a lot less when trading other stocks.

But £7.60 covered my average cost, so I’m happy just to get rid of them as they’re the only shares I’ve had so far that have annoyed me with unexpectedly a high prices on buy compared to what the “current” price was.

So, is the reason just because it’s AIM? Or because it’s low volume?

The reason why some AIM stocks have massive spreads is liquidity, in that the Market Makers do not believe they can easily sell the shares as quick, so if there is only a small percentage in free float then this becomes a problem for the MM to sell the shares on, so in order to buy your shares the market maker will usually issue insane spreads so to take the chance that they can sell them on

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AIM 100 companies have an average bid-ask spread of 1.96%, whilst the smaller cap businesses listed on the rest of the market have an average bid-ask spread of 6.3%.
To put this in context, long-term returns from UK equities average around 7% a year.

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6.3% seems incredibly high! I’m going to stick to the bigger higher volume shares and ETFs for now. I don’t actually plan to sell anything any time soon anyway, I just got worried with TM17 when it looked like I couldn’t get rid of it at all, as it made me realise if I had a more urgent need to sell I could be in trouble.

It’s the volume of trades which is of more concern to you rather than the volume of shares
T17 for example averages 100-200 trades a day. This isn’t too bad as some AIM stocks have even lower trade volumes

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It might be because those trades you saw by-passed the Market-Maker.

If a Platform with a large customer base has both buyers and sellers of the same stock (and inside the quoted bid-offer spread), their customers may get filled first…

…but they still get reported to the Stock Exchange.

And there is another factor.
Those other platforms probably charge a commission.
So partial fills (with a commission each time) do not occur (unless specifically permitted.)

Hence your trade for a handful of shares may not “help” the (higher) buyer with a Limit Order.

Does this make sense ?

Grrrr, stupid case of older limit orders failing to complete again.

This time with a limit sell order on GSK created 12 days ago for 1394p. Price went up to 1395.8p and given the spread is only 0.4p, this should have sold.

Cancelled and placed a new limit sell at 1395p and it sold as expected.

What’s the point of having limit orders that last 3 months if you have to manually cancel and re-submit them if they’re more than a few days old?

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Does this happen? I set some limits straight after buying and don’t look at any more as I assumed they would work but didn’t realise this was the case. Will be well annoying if it is as that is one of the main reasons to buy Plus.

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It’s possible it just works a long way down the queue at the broker and that it will eventually get processed. But if it takes too long, it could easily miss my target price and go back below before it completes. I’ve been lucky each time it’s failed as the price has continued increasing, so I actually made a bit more because of this… But, it’s worrying that it’s happening at all.

Having said that, I’ve also had some limit buys from stocks that I’d long forgotten about, but when that happens it’s hard to be sure how long it took to react to reaching the limit, because I wasn’t actively watching the stock.

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I’ll have to watch out for it. :+1: I buy some stocks I think will go up say 10% in next couple months and then don’t monitor until the 90 days runs out on my spreadsheet.

What did freetrade say?

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More on this. Yet another example of limit orders not completing.

This is a limit order that’s still open from a week ago:

And this is a new limit order I created today for the same price, both were active at the same time but only this one completed:

As of now, the price seems to have gone even lower and my original limit order STILL hasn’t completed.

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What has freetrade said?

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I didn’t ask on the previous occasions because I’d already deleted the limit orders.

This time the limit order is still active, the price has been 1p under for about 20 minutes now. I asked them via support over 15 minutes ago and they haven’t even replied at all yet.

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So, basically nothing. I’ll update if they actually make an effort to look into it, but their reply seems to suggest they just cut and pasted a stock reply rather than actually reading what I’d sent.

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And I have no idea now if they’ll eve get back to me, as the limit order finally completed after the price target had been hit for about 40 minutes.

I had 3 other limit orders go through in the mean time, all for same or lower prices, so if this had been a short dip, this old limit order would have missed it entirely.

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I get this happen sometimes (not too often) even when a few hours old.
It definitely happens, no idea why, but for some reason they sometimes just get stuck.

Example, let’s say I have a limit order for 10 shares @ £1.50
The price drops to £1.495 and nothing happens. 20 minutes later it’s down to £1.485, still nothing.
Out of curiosity I then do another limit order for 1x share @ £1.49 and it goes through straight away.
I then do it again for 9 shares - it goes through straight away.
The original limit order is still not happening so I cancel.

I’m not bothered, I don’t have many high expectations for a free platform and I work with it in mind.
Just pointing it out to those that might think it’s some kind of user error or wrong expectation. Nothing to do with spread, or current price, or whatever. It simply does happen, luckily it’s not too often.

It’s just done it again with MNG, luckily I spotted it. Absolutely useless for buying the dip.

I guess I would say it’s a case of “you get what you pay for”, but as limit orders are a plus feature, I’d expect it to work as advertised.

EDIT: And again with BP with a limit order placed yesterday.

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This is really poor! I dont look at my limit orders as i trust the monthly fee to get these functions actually works :joy: That said I don’t seem to get many at all go through so starting to think they would be better off not offering a service if it is not going to do what it says on the tin. :man_facepalming:

It’s fair to say customer service is useless and out of their depth. After 3 hours delay, they clearly didn’t actually read any of my subsequent messages to the extent where they could comprehend the meaning.

Instead they parroted another stock response about how if my limit order doesn’t execute, it couldn’t have reached the limit price.

I’m rapidly losing confidence in Freetrade, both in terms of the platform itself and their approach to customer service.

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