It sounds like it’s more to do with Freetrade’s proposed version being a poor take of what others are doing. It also had very bad optics in comparison.
So, in the next few weeks, we will probably hear more about
- The Convertible Note funding and the early Conversion of some of the note
- Crowdfunding for the Convertible Note
- Plans for Securities Lending
- The new Pricing Plans mentioned in the last AMA
Have I missed anything?
Capitalism isn’t all sweetness and light. If you own shares in a company you are expecting them to eventually pay you back, for example by dividends. This is money that could otherwise have gone to find a treatment for cancer (per your example - don’t take this too seriously).
Short sellers will on aggregate be wrong, the market goes up overtime. The short sellers are going to be there either way, if you have conviction in a stock, then it shouldn’t worry you, they will be buying it high and and selling higher.
By this logic though, people selling stock are also working actively against your interests, as are everyone else who is not buying that particular stock.
Freetrade offer a service for free to a large extent, but they are also a company that needs to make money, so this is what is in it for you, not paying the fees of HL or AJ bell.
And yeah, some people just wanna watch the world burn.
Yup. A serious discussion about short selling … merits a paper. An example is
Short Selling and the Price Discovery Process | The Review of Financial Studies | Oxford Academic.
This is an emotive topic so can we please keep the discussion around the news shared today by @saf and not relitigate the pros and cons of short selling. This has been covered ad nauseous on the original thread (now closed for this very reason)
Thanks Folks
How is it free when I pay £9.99 a month?
There is a risk that if there is a short squeeze you lose your shares. For example. I own stock in a battered medtech company. This company has a very unhealthy share price but is having a lot of success and would be a buyout target. Any buyout offer could be at high multiple of the SP. No guarantee that’s the short could cover that and I get my stock back
I suspect that Freetrade do not want to launch securities lending at the moment with the market being so volatile.
If the Russia / Ukraine war ends or inflation slows significantly, markets could spike higher - impacting short sellers, and so represent a higher risk for any shares that have been borrowed.
I doubt that Freetrade would want any customers to suffer a loss (due to the reputational risk Freetrade would incur), so would need to keep capital available to cover any losses - and at the moment they would want to have as much capital available as possible for their normal business activities.
Why is the rollout postponed?
I’ll wait for the August investor update to form an opinion but I hope they provide some much needed detail and clarity on the path forward as there seem to be few wins as o late. I take this more as a re-focus push which I understand and agree with but there is much need for comms.
This topic was automatically closed 416 days after the last reply. New replies are no longer allowed.