I just bought some US stocks and noticed that there is a very noticable markup vs the realtime price from Yahoo/Google Finance (after including the 0.45% FX fee) when looking at the contract. The real price + FX fee never went above the price that I was charged on the contract. Any reason for this?
Iām an Alpha user and I also have been charged Ā£1 for every trade, but I assume this will be reimbursed soon?
E.g.: GOOG price stayed between $1136.24 and never went above 1136.5 for many minutes. Freetrade itself never went higher than 1138.3 which is reasonably close.
But I was charged 1151.09 (a 1.3% difference per share)
Hereās why thereās sometime a difference between the price that you see in the app / on a site like Google Finance & what you pay -
The single stock price you see for a stock in the Freetrade app, on Google Finance or in the newspaper is generally not the price that you can actually buy or sell a stock at.
Thereās always a spread: the difference between what someone is willing to buy a stock at (bid) and what they are willing to sell at (ask).
The more efficient the market, the tighter (smaller) the spread.
The market maker business model means offering bids and asks on many stocks, always willing to buy or sell at some price. They make money from the difference between these prices.
We, on the other hand, never make money from the spread or include hidden commission baked into the spread.
quote from the āHow do Freetradeās orders āexecuteā?ā blog post
When we process your order, weāre required to give you ābest executionā by the regulator. You can see our order execution policy here & read more about how we handle your orders here -
To clarify, this isnāt a fee, itās the rate that we use to convert your currency when you place an order.
I hope that helps!
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Iām aware of spreads, but these are much higher spreads than what Iām used to seeing for buying some of the most liquid stocks on the market. The spread seems to be between 0.5% and 1% on top of the FX loss. I was expecting a spread close to zero for most of my trades.
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What time did you execute your trade? And exactly which stocks?
I also asked the same question over the weekend about whether freetrade widens the bid/offer spread. Appreciate that it was over the weekend so the team probably havenāt seen it yet.
Iāve just answered this here for you - Do Freetrade make money on the spread? Do Freetrade widen their bid/offer spread? The answer is: NO - #3 by Mohsin
I used instant orders for e.g. Google and Microsoft. I.e. stocks that are part of the most active stocks in the world, a 1% spread would be more likely for smallcaps.
The theory is sound, but is the implementation? Is there someone actively checking for bugs, especially in the US-related code, which is less tested in the wild?
Freetrade undertakes to monitor execution performance for compliance with this policy
Is your monitoring currently in place? Is it comparing the prices you end up charging customers with the āgoodā prices from the LSE order book, and are they always within an acceptable distance? What do you consider acceptable?
Since you use an LSE market maker for US stocks, are they just generally overpriced compared to, say, going to a US-based market maker? Is that why there have been multiple people making this kind of complaint on the forum, but only for US prices?
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Can you share the exact time it was executed and the exact ticker as Google has a few?
Iām curious as i work in markets myself and a few things do not add up about freetradeās model (YET!)
Wasnāt aware that FT buys GOOGL instead of GOOG, I always had the non-voting shares before (GOOG).
Thereās a small premium that explains most of the difference I noticed but not all.
Need to look into the other stock spreads tomorrow.
Iāve had a chat with our team today & wanted to share some more details about how we monitor our prices and make sure that we our delivering best execution for our customers.
We use a third party service that receives data about our trades and compares it to the UK & US markets at that time. We then analyse this data regularly to check that the prices are what they should have been.
If you have any queries about specific orders, you can always message us via the app and weāll check on them for you.
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On what basis do you make judgement whether the prices are what they should be or not? Is that a manual or an automated process? 
I only asked because I was not quite sure what Freetradeās involvement in the execution process is. I was under the impression that you send your orders through the exhange, as a member firm, and market makers facilitate them without your further involvement.
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To add a bit more detail to my previous comment, the service that gives us the comparison of our prices vs the market prices enables us to make sure that the price that was paid was close enough to the market price at the time, if that makes sense.
The reporting is automated but we do some manual analysis and investigation too 
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I suppose the question is what is Freetradeās definition of āclose enoughā. Thank you so much for all this extra information and transparency Alex!
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Thank you so much - this is a great explanation for a novice!
My understanding in simple terms is, market makers collect spreads (difference between bid and ask).
As per National Best Bid and Offer - MarketsWiki, A Commonwealth of Market Knowledge
one should get price no more than best ask price at the time of trade execution.
So if we roughly now when trade has happened we can arrive maximum and minimum prices for a trade could have been executed (if the trade size is small).
For liquid stocks like MSFT I think 0.5% spread is very high.
1+2, Agree that there is a time delay for most retail investors, so the current āliveā price isnāt really live. However, you can use public data to work out the (roughly) MID-MARKET price traded at a certain time in the past.
2, 1%+ isnāt normal in quiet market. On a day with a lot of data or news coming out then yes, everything can drop 50%, who knows. But if nothing is happening the price isnāt gonna move by 1%+ within a few minutes for the most liquid stocks.
3, I see your caveat so iām hopefully not gonna come across as jumping down your throat just to clarify rather than contradict here
A market maker isnāt there to match seller and buyer exactly, not at all time anyway. If that was the case, it would be the easiest job ever. Market makers manage risk by making prices. They will give you a price at which they are happy to take on the other side of your trade. Thatās why there is liquidity in the market even when there isnt simultaneous selling and buying.
So i would say that a market maker has a lot of say in the price.
4, Yes most retail stock brokers like Freetrade send it to a network of market makers. However, my experience using some other brokers is that you are shown a live price and have 15s to execute. Of course for this privilege they are charging you up to Ā£15 a trade so iām not arguing that this is better for most Freetrade users. The potential issue here is that, the trades that are currently instantly executed through freetrade, you take the price offered to you. If iām a mkt maker and i see Freetradeās trades during the day, i will know that i donāt really have to show a very competitive price to win the trade. This is why it is important to have control in place to monitor best execution.
if the tiny variances in price really matter to anybody then retail investing probably isnāt for them.
Overall i would say it is very very important that people are aware of the total costs of their transactions. In this low yield environment, pissing away 1% in transaction cost where the bid/offer spread is sub 0.1% isnāt OK. It seems like it wasnāt the case for OP in the end but i think OP and others should be encouraged to look into their costs in any case.
A simple 5ā read for anyone who cares
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Not being able to use the FreeTrade app (due to the Android version limitation) I canāt say whether or not FT allow limit orders or not? Was your order a market order by chance?
Yes market, thereās no option for limit orders at the moment. Once thatās available I would definitely place limit orders.
I have a question about a specific order, which was filled at a very poor price and an anamoly when looking at the public trades on the LSE. It was around 0.7% off the spread. Contacted support and was told that I shouldnāt be using the app for āday tradingā and perhaps the platform wasnāt right for me. Fair enough.
The issue I have is that I cannot trust you to execute at a reasonable price. Iām not talking about normal market fluctuations/spread/real time delays, this is just a poor deal being struck.
I was happy to read a quote in the community pages where your vision for customers was to be able to trade whenever they liked without worrying about fees. This isnāt the case. I donāt want to be pigeonholed into going uber long on every trade, itās severely strategically limiting in a marketplace already biased towards big clients.
Edit: this isnāt the first time, hence why Iām making a big deal out of it now. It was also an instant order Iām paying for.