Imagine your account is in sterling and you own US stock that is listed on a US exchange in USD, say MCD. You want to sell your holding in MCD and immediately replace it with a different US listed stock, say KO. The way I understand it, freetrade sells your MCD shares on NYSE, charges a conversion fee for the conversion of the USD received from the sale to GBP, converts those GBP funds back to USD, and buys KO on NYSE. Result: 2 x forex change fees of .45%, amounting to a total fee of .9%.
However, since the settlement period is T+3, the conversions are virtual and never really happen. Does free trade nevertheless charge those fees?
North American brokers offer customers to “wash trades” to avoid these fees. You basically call the broker after making both trades, tell them to wash the trade, and no forex fees arise.
Do you offer this service too? You could make it dependent on volume, say you only wash trades over £1,000 or so…