X-O Low charges, high costs?

puzzledinvestor

I've recently opened an account with x-o after reading some decent reviews, attracted by the low charges.
After getting a few times a quote above the official bid price, and having some available funds with HL, I tried to make a quick test, which while it is obviously far from scientific, seems quite telling.

While for 2 a couple of FTSE100 stocks the bid prices were identical, when checking some AIM stocks I'm interested in, some quotes were the same, but in 2 other cases the quote given by HL was substantially better: 15.4 vs 15.8 (this one in 2 different days) and 43 vs 45 in another.

Obviously those differences will be much more important compared to 'small' savings in the dealing charges, so I was surprised of not being able to find any information at all about this, despite many comparatives, like the excellent thread by Special_Saver2, they tend to focus mostly in dealing charges.

If anyone has such information or any recommendation on which brokers to use to avoid overpaying for stocks with meaningful spreads, it would be greatly appreciated.

Thanks.

westy22

This thread has recently touched on the subject of spreads, price improvers and number of market makers https://forums.moneysavingexpert.com/discussion/4064443

There are so many variables such as order size, split second timing, number of market makers searched etc but I agree it would be great to see a list of the number of market makers that each broker uses.

TDM850

The spread is also determined by the number of RSP's (Retail Service Providers) that the broker's dealing system goes to in order to obtain 'best price'. For instance SimplyStockbroking and Traders Own use the same back end and source most of the RSP's in the market. That means if you compared the spread and prices back to back at identical times on different platforms you will probably find these two are the most competitive on spread.

JamesU

TDM850 wrote: »

The spread is also determined by the number of RSP's (Retail Service Providers) that the broker's dealing system goes to in order to obtain 'best price'. For instance SimplyStockbroking and Traders Own use the same back end and source most of the RSP's in the market. That means if you compared the spread and prices back to back at identical times on different platforms you will probably find these two are the most competitive on spread.

TDM850, are you in some way affiliated with Traders Own? Or are you just a customer? You seem to plug them in some way at almost every opportunity in all of your posts.

My feeling was that Traders Own should be given a wide berth for reasons discussed previously in the link below, but I could be wrong on this, and if so can amend my comments accordingly.

http://forums.moneysavingexpert.com/showpost.php?p=54176923&postcount=5

JamesU

TDM850

Hadn't seen that James - I am a customer, I use their trading platform and have a trading and an ISA account.

I think your comments are off the cuff and poorly researched. Had you undertaken research you would not only realise that SimplyStockbroking own a significant % of Traders Own Plc but also that all dealing account funds are held in the SimplyStockbroking nominee account.

Added to this, in order to offer dealing accounts the company in question if UK based (which Traders Own is) will be FSA registered and as such any funds / stocks held in the nominee account are subject to the protection of the FSCS (Financial Services Compensation Scheme). Exactly the same scheme applies to X-O, Barclays Stockbrokers, Selftrade et al.

So yes you should amend your comments accordingly.

Tom

JamesU

TDM850 wrote: »

Hadn't seen that James - I am a customer, I use their trading platform and have a trading and an ISA account.

I think your comments are off the cuff and poorly researched. Had you undertaken research you would not only realise that SimplyStockbroking own a significant % of Traders Own Plc but also that all dealing account funds are held in the SimplyStockbroking nominee account.

Added to this, in order to offer dealing accounts the company in question if UK based (which Traders Own is) will be FSA registered and as such any funds / stocks held in the nominee account are subject to the protection of the FSCS (Financial Services Compensation Scheme). Exactly the same scheme applies to X-O, Barclays Stockbrokers, Selftrade et al.

So yes you should amend your comments accordingly.

Tom

Hi Tom, yes I did read how TradersOwn are affiliated to SimplyStockbroking, their use of the SS platform and that funds are held at SS's nominee account. All this is documented on the TradersOwn site. I did not suggest there were any difficulties with FSA compliance or the safety of funds held in the nominee account. Regarding who owns and has control of TradersOwn, for sure I have not looked into this specifically, but would spend a couple of pounds on Company House finding out this, and the state of their accounts when they are filed in Aug 2012, if I was interested in joining TradersOwn.

The point I referred to was the perception and marketing of TradersOwn as a viable "PLC" when it is nothing of the sort, that was my main concern, hence the comments as below from my previous post. Nothing that has been said has changed my views on this. Having said that, apologies if my comments appeared overly blunt and "off the cuff" as there was no intention to offend anybody that is happy with the service that TradersOwn provides.

JamesU


http://forums.moneysavingexpert.com/showpost.php?p=54176923&postcount=5
Traders own seem a fairly obscure operation set up in 2010 with a tidy web front but with no real track record. It seems like a virtual company using an existing simply stockbroking platform and TradersOwn is a small spin out from Sussex innovation centre. According to accounts breakdown filed in 2011 (link below) they have a net worth of just £4,500.......hardly the right profile to try marketing themselves as a PLC. Personally I would give them a wide berth for now.

http://companycheck.co.uk/company/07169499

It was set up in 2010 with emphasis on social networking and members that trade get non voting shares that can be used if it were ever to float on the market (as opposed to holding real shares in the existing company), hence why it is called a "PLC". The set up and accounts at Traders Own look like a bit of a joke to me, they could fold at a minutes notice and I would avoid them myself.

JamesU