Investment Trusts - availability

AsifM068

Morning Forum

Are investment trust stocks limited to purchase?

The reason I ask, is that I attempted to purchase £1000 of City of London IT via my practice Trading 212 account but was only limited to around £700.00; this is a concern as I would be looking to purchase around £100,000 of City of London IT from Trading 212 following an ISA transfer in the future. Is this something that I need to raise with 212 or are investment trust stocks limited to purchase in general?

Any advice would be much appreciated. 

bd10

Over 600k shares in City of London IT were traded on the exchange yesterday:

https://www.theaic.co.uk/companydata/0P00008ZME

So there is plenty of liquidity in the market. So smaller obscure ITs may have less liquidity but to buy 100k of City should not be a problem. For comparison, I bought 90k CGT the other day and got filled in one trade. Am not with 212 though but in my SIPP elsewhere.

When I bought 50k of a smaller IT last week I had some liquidity issues early in the morning. I would wait until late morning so that the order books are full and liquidity providers can fill larger orders.

So in theory 212 should be able to quote you a price for 100k, but what I would do is compare quotes, i.e. request a quote for 5k, 10k, 20k, 50k, and see whether you still get the same price each time. If not, you might be better off splitting the order into multiple transactions. Based on yesterday's traded volume you would make up 4% of the day's volume, so be a bit mindful of that. Worst case, you could split your purchases over a few days.

george4064

Not sure what a 'practice' Trading212 account actually is, but sometimes first thing in the morning (8 to 9am-ish) when the market opens there isn't much liquidity. If you try later in the day there's usually more liquidity as market makers put up more shares (or willing to buy from sellers).

Apodemus

I'm sure you know what you are doing, but have you double-checked that you were choosing the right stock to click on?  Apart from City of London Investment Trust (ticker is CTY) there is City of London Investment Group (CLIG) and City of London Group (CIN).  While CTY has a market cap of about £1.9 billion, the other two are much smaller - at £214 million and £62 million respectively - these latter two will almost certainly have a smaller market for the shares.

I guess there is also the possibility that you inadvertently clicked on one of the CTY preference stocks, which are closed-end investments, rather than ITs but again would potentially have less liquidity than the main IT stock.

cloud_dog

AsifM068 said:

Morning Forum

Are investment trust stocks limited to purchase?

The reason I ask, is that I attempted to purchase £1000 of City of London IT via my practice Trading 212 account but was only limited to around £700.00; this is a concern as I would be looking to purchase around £100,000 of City of London IT from Trading 212 following an ISA transfer in the future. Is this something that I need to raise with 212 or are investment trust stocks limited to purchase in general?

Any advice would be much appreciated. 

Isn't it more likely to be a T212 'issue' rather than the market?

Ignoring March 2020, I've never experienced any liquidity issues buying / selling ITs.

masonic

Don't T212 only let you invest a percentage of your available cash because they don't execute orders straight away and therefore need a margin to avoid you buying more shares than you can pay for?

AsifM068

george4064 said:

Not sure what a 'practice' Trading212 account actually is, but sometimes first thing in the morning (8 to 9am-ish) when the market opens there isn't much liquidity. If you try later in the day there's usually more liquidity as market makers put up more shares (or willing to buy from sellers).

Many thanks for this. A 'practice' account is a dummy account with fake cash that 212 provide for newbies like me I guess to 'practice' investing.

AsifM068

Apodemus said:

I'm sure you know what you are doing, but have you double-checked that you were choosing the right stock to click on?  Apart from City of London Investment Trust (ticker is CTY) there is City of London Investment Group (CLIG) and City of London Group (CIN).  While CTY has a market cap of about £1.9 billion, the other two are much smaller - at £214 million and £62 million respectively - these latter two will almost certainly have a smaller market for the shares.

I guess there is also the possibility that you inadvertently clicked on one of the CTY preference stocks, which are closed-end investments, rather than ITs but again would potentially have less liquidity than the main IT stock.

Thanks for this; I will double check ticker symbol for CTY.

AsifM068

bd10 said:

Over 600k shares in City of London IT were traded on the exchange yesterday:

https://www.theaic.co.uk/companydata/0P00008ZME

So there is plenty of liquidity in the market. So smaller obscure ITs may have less liquidity but to buy 100k of City should not be a problem. For comparison, I bought 90k CGT the other day and got filled in one trade. Am not with 212 though but in my SIPP elsewhere.

When I bought 50k of a smaller IT last week I had some liquidity issues early in the morning. I would wait until late morning so that the order books are full and liquidity providers can fill larger orders.

So in theory 212 should be able to quote you a price for 100k, but what I would do is compare quotes, i.e. request a quote for 5k, 10k, 20k, 50k, and see whether you still get the same price each time. If not, you might be better off splitting the order into multiple transactions. Based on yesterday's traded volume you would make up 4% of the day's volume, so be a bit mindful of that. Worst case, you could split your purchases over a few days.

Great stuff - thank you.

AsifM068

Team - it has occurred to me that I placed the order for my CTY shares around 8.00 pm, outside trading hours; could that be a possible reason that 212 restricted the order?

jimjames

AsifM068 said:

george4064 said:

Not sure what a 'practice' Trading212 account actually is, but sometimes first thing in the morning (8 to 9am-ish) when the market opens there isn't much liquidity. If you try later in the day there's usually more liquidity as market makers put up more shares (or willing to buy from sellers).

Many thanks for this. A 'practice' account is a dummy account with fake cash that 212 provide for newbies like me I guess to 'practice' investing.

So you weren't actually "buying" anything, just practicing as if you were going to? The actual market compared to a practice account is likely to be different and may not behave as you are expecting as a result.

AsifM068 said:

Team - it has occurred to me that I placed the order for my CTY shares around 8.00 pm, outside trading hours; could that be a possible reason that 212 restricted the order?

If it's a practice account surely there is no order?