Freetrade - any feedback?

DireEmblem

maxsteam said:

numbersrule said:

I believe that a company offering financial trading services may make some money from the width of spread they offer

The platform lacks transparency but they should not be loading the spread. However, they can make money by matching buyers with sellers, without using the market, and by taking money from market makers in return for passing business to them.

Taking money from market makers in return for passing business to them is otherwise known as Payment for Order Flow, and has been banned in the UK since 2012.

What they could make money from is:

• FX Fees.
• Premium/ISA wrapper account fees.
• Security Lending fees.

End of day they are a business so out there to make profit.  We want low cost trading but that has to be funded within the regulations set out in law which is the three points above.

Edit: What @GeoffTF said.

GeoffTF

DireEmblem said:

maxsteam said:

numbersrule said:

I believe that a company offering financial trading services may make some money from the width of spread they offer

The platform lacks transparency but they should not be loading the spread. However, they can make money by matching buyers with sellers, without using the market, and by taking money from market makers in return for passing business to them.

Taking money from market makers in return for passing business to them is otherwise known as Payment for Order Flow, and has been banned in the UK since 2012.

What they could make money from is:

• FX Fees.
• Premium/ISA wrapper account fees.
• Security Lending fees.

End of day they are a business so out there to make profit.  We want low cost trading but that has to be funded within the regulations set out in law which is the three points above.

Edit: What @GeoffTF said.

Freetrade does not appear to do stock lending. They have to disclose it if they do. Degiro does do stock lending.

adindas

milton1970 said:

Looking at Freetrade for a bit of investing fun outside of isa & SIPP 

Understand that it is zero commission so assume the gain on wider spread - anyone any experience of how wide ?

Does it allow international market trades ?

Any feedback on Freetrade appreciated

TIA
M

Gain from spread  is common on CFD, but Free trade does not offer CFD.

In GIA and ISA they certainly cannot load the spread without making it clear that they do that.

It is not really zero commission as, there is still FX fees/commission.

They allow international market trades mainly the stock listed in the US stock exchange.

This is a comparison of their fee structure with other investing/trading platform.

If you are doing frequent trading that, you will be better off using Freetrade rather than the platforms listed above. But T212 defenitely beat them but it is currently close for new applicant.

I can not provide feedback on Freetrade as I have not used them.

GeoffTF said:

Paying for order flow is not permitted in the UK. They are not likely to be able match buyers and sellers with real time trades.

AFAIK, this is certainly true. PFOF (Payment for order Flow) is not allowed in the UK, CA as well as some countries in the EU.

The SEC and the US Congress is looking into it after the emergence of GME and AMC case highlighting the conflict of interest between the market maker and the broker.

wmb194

adindas said:

milton1970 said:

Looking at Freetrade for a bit of investing fun outside of isa & SIPP 

Understand that it is zero commission so assume the gain on wider spread - anyone any experience of how wide ?

Does it allow international market trades ?

Any feedback on Freetrade appreciated

TIA
M

It is not really zero commission as, there is still FX fees/commission.

Only on non-UK trades.

In my experience T212 is dreadful e.g., it often doesn't execute orders very quickly and it can literally take hours if not days for small caps and, whilst not so bad, I've found it annoyingly slow with FTSE350 companies. In contrast, with and at best order, Freetrade will execute immediately or not at all. I've also found T212's customer to be poor when I was chasing a missing dividend.

milton1970

Have given Freetrade a go .. as it is free 

Experience so far not too bad if you are looking for shorter term trading but seeing the price you are buying / selling at isn’t overly clear 

Prefer / plan on holding portfolio in a more solid service & using Freetrade for quick punts

Others may disagree .. as always   

M

wmb194

milton1970 said:

Have given Freetrade a go .. as it is free 

Experience so far not too bad if you are looking for shorter term trading but seeing the price you are buying / selling at isn’t overly clear 

Prefer / plan on holding portfolio in a more solid service & using Freetrade for quick punts

Others may disagree .. as always   

M

Yes, this is the issue with it but if you want a firmer idea of the price you're going to pay or receive* use another broker to get a quote. Except for one small cap investment trust, so far for me this technique has been very reliable. Obviously live data feeds will also give a good idea. With large and mid-cap shares it's less of an issue anyway given the bid-offer spreads are usually quite tight.

*If you happen to also hold the same share with another broker.