Broker recommendations for small AIM stocks.

wmb194

Freetrade currently offers 394 Aim listed securities. Some are only available with the 'Plus,' £10pm account option. Freetrade polls the same market makers as other brokers so the prices offered should be the same but, as it doesn't have this feature, you could get get a 15 second quote with another broker first to get a firm idea of the price.

Select, 'AIM' in the 'stock exchange' filter:

https://freetrade.io/stock-list#stock-list-table

Trading212 might be another option but I find it to be very slow to fill orders in less liquid securities so I wouldn't recommend for Aim.

DireEmblem

Thanks - 212 and Freetrade are both write offs.  They dont have the full selection of the AIM100 for example.

Thrugelmir

DireEmblem said:

Thanks - 212 and Freetrade are both write offs.  They dont have the full selection of the AIM100 for example.

If x-o don't have a stock listed to trade. It's possible to ring the dealing desk and ask for it to be added. 

wmb194

DireEmblem said:

Thanks - 212 and Freetrade are both write offs.  They dont have the full selection of the AIM100 for example.

Sure, but if they offer at least some of the securities you're looking for it might help to keep your costs down. 

Thrugelmir

wmb194 said:

DireEmblem said:

Thanks - 212 and Freetrade are both write offs.  They dont have the full selection of the AIM100 for example.

Sure, but if they offer at least some of the securities you're looking for it might help to keep your costs down. 

They'll only offer the liquid stocks. The largest Boohoo is capitalised at £3.77 billion. At the other end of the spectrum Walcom group is just £10m. Buying any amount of stock may be a long drawn out process as a consequence. Anything under £50m is often thinly traded, below £100m to £150m market capitalisation is often of little interest to investment managers. Other than the specialist funds that focus on a niche range of companies. 

maxsteam

Most brokers will deal in AIM stocks but the dealing process can sometimes be different to that for main-market stocks, depending on the particular company. I have one AIM stock on Degiro's platform. The spread is about 5% and sometimes orders at the quoted bid/offer prices will not be executed even if the order is placed at the beginning of the day and left until close. By comparison, an FTSE 100 stock will have a spread of less than 0.1% and orders at the quoted prices will usually be executed instantaneously during the trading day.

In theory, the spread for a particular stock at a particular time will be the same whichever broker you use.

If you understand what you are doing, there's no reason why you should not put a few pounds into an AIM stock or two but, if you are building up a new portfolio, I would recommend that you start with some FTSE stocks and gain some experience there before venturing into the alternative markets.

wmb194

Thrugelmir said:

wmb194 said:

DireEmblem said:

Thanks - 212 and Freetrade are both write offs.  They dont have the full selection of the AIM100 for example.

Sure, but if they offer at least some of the securities you're looking for it might help to keep your costs down. 

They'll only offer the liquid stocks. The largest Boohoo is capitalised at £3.77 billion. At the other end of the spectrum Walcom group is just £10m. Buying any amount of stock may be a long drawn out process as a consequence. Anything under £50m is often thinly traded, below £100m to £150m market capitalisation is often of little interest to investment managers. Other than the specialist funds that focus on a niche range of companies.

Could well be but the OP hasn't actually told us which companies and whether they've looked to see whether Freetrade or T212 offers them or not. I'm not going to wade through them all but the very first company in Freetrade's list of available shares is Challenger Energy Group (CEG) and, according to the LSE's website, it has a market cap of just £10.26m, so right down there at the bottom end of AIM's market cap spectrum... If the OP is only dealing in small quantities it shouldn't be a massive issue. 

IIRC Freetrade takes requests for companies to add.

Btw, Walcom was delisted in July 2020.

maxsteam

imho Freetrade should be avoided for AIM stocks. As I mentioned previously, the spread on FTSE100 stocks is negligible but the spread on small company stocks is significant, whichever broker you choose. If you trade on Freetrade, they don't even tell you what the spread is. They try to pretend that there are no dealing costs. If there's a strong chance that the spread will be significant, you really need to know what it is before you agree to trade.

wmb194

maxsteam said:

imho Freetrade should be avoided for AIM stocks. As I mentioned previously, the spread on FTSE100 stocks is negligible but the spread on small company stocks is significant, whichever broker you choose. If you trade on Freetrade, they don't even tell you what the spread is. They try to pretend that there are no dealing costs. If there's a strong change that the spread will be significant, you really need to know what it is before you agree to trade.

Spread isn't the same as dealing commission and you'll have to 'pay' the spread whichever broker you use so it's moot. Freetrade keeps your costs down. It also enables you to average in and out in ways that would be cost prohibitive with other brokers.

This is why I always say to use another broker to get a firm quote before making a trade and it also helps if you make use of live pricing and trade data to see how recent trades have priced. Ultimately, it doesn't make a massive difference anyway - it's just the nature of small caps. Not all of them have terrible bid/offer spreads either, it really just depends on how well traded they are. The OP hasn't told us which companies he's interested in so it's all just speculation and generalisations anyway.

DireEmblem

Thanks but yes I will be avoiding FreeTrade.  Its good it has some AIM stocks, but these are mostly behind a paywall, which although not that high at £9.99 a month, would eat away at the size I would be restricting my AIM portfolio to.

I suspect I will use possibly 2 brokers to gain the most cost effective access.