USD Trading using unsettled cash and avoiding the FX charge

A suggestion to deal with the USD balance problem - two issues

A. Maintaining a USD balance in a GIA might be costly for Freetrade and possibly hard to administer.
B. An ISA can not hold foreign balances.

Given solving A doesn’t resolve B. Here is an alternative -

Currently a USD trade cash settles after 2 business days - I would request that Freetrade develop a feature that will allow the unsettled cash balance to be traded into another US stock, ETF or cash equivalent product within a certain timeframe, thus avoiding the bid/offer spread and the cash conversion fee.

Naturally this fee is a source of revenue, so I would propose either:

  1. A fixed monthly fee.
  2. The bid offer spread saving, retained by Freetrade.
  3. A combination of the two.

Where no new trade is entered, this would be converted back to GBP using the 0.45% charge or a nominal charge if the customer is paying a fixed monthly fee.

Naturally the same solution can be rolled out for the SIPP.

Unless I’m matinee missing what your suggesting, you can already make trades with unsettled cash.

Sounds like you’re suggesting to have a sort of shadow USD account based on how long it may or may not take for cash to settle? If that’s what you mean it sounds interesting but it sound like it may be more work than just haven’t a USD account option?

Note - edited the idea title to clarify the feature.

Agreed,though Freetrade will charge you the 0.45% irrespective for the conversion on the sale and purchase.

So the idea is that you would trade before the conversion takes place - if the cash doesn’t settle in USD - you won’t need to have a USD account.

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