Question when buying an indvidual Gilt (TR25)

hallmark

Just looking at buying some TR25 on AJ Bell via a Market Order.

Where it says Enter Value (£) I'm entering £10,000 excluding charges (which are £9.95)

When I proceed to a quote it says:

Indicative Price £1.0026
Estimated Consideration £9,999.99
Dealing Charge £9.95
Estimated total £10,227.78

I'm guessing this might be to do with Clean/Dirty pricing? (which I kind of understand but not exactly an expert). 

Anyway, my basic question is:   Is the way this works that whatever price you enter under Enter Value (£) is the number of £1 units you're buying (in this case 10000) then the actual price will be 10000 x whatever the current buying price is? (in this case something like 102.2778)?

And that I'll pay £10,227.78 for 10,000 of this gilt?

It's fine if it works this way, just trying to understand how it works as if I was buying a share fund for example, and entered £10,000, it would give me £10,000 worth, not 10,000 units worth.

thanks

wmb194

hallmark said:

Just looking at buying some TR25 on AJ Bell via a Market Order.

Where it says Enter Value (£) I'm entering £10,000 excluding charges (which are £9.95)

When I proceed to a quote it says:

Indicative Price £1.0026
Estimated Consideration £9,999.99
Dealing Charge £9.95
Estimated total £10,227.78

I'm guessing this might be to do with Clean/Dirty pricing? (which I kind of understand but not exactly an expert). 

Anyway, my basic question is:   Is the way this works that whatever price you enter under Enter Value (£) is the number of £1 units you're buying (in this case 10000) then the actual price will be 10000 x whatever the current buying price is? (in this case something like 102.2778)?

And that I'll pay £10,227.78 for 10,000 of this gilt?

It's fine if it works this way, just trying to understand how it works as if I was buying a share fund for example, and entered £10,000, it would give me £10,000 worth, not 10,000 units worth.

thanks

The additional will relate to accrued interest you're paying for (this is a 5% bond). You'll get it back as part of the next coupon payment or when you sell if it's before then.

Hoenir

hallmark said:

I'm guessing this might be to do with Clean/Dirty pricing? (which I kind of understand but not exactly an expert). 

The additional £217 is interest. The price you'll pay will include accrued daily interest from the last due date until today. When the next 6 monthly payment is made you'll receive the full six months distribution. The contract note will detail this precisely.  

hallmark

Looks like the AJ Bell interface is a little misleading for this. 

It quoted an Estimated total £10,227.78 but the order has gone through and instead of buying 10,000 units for £10,227.78, it's actually bought 9765 units, bringing the total cost to around £10,000.

Which is what I was expecting when I submitted the quote but not what it said it was going to do........

wmb194

hallmark said:

Looks like the AJ Bell interface is a little misleading for this. 

It quoted an Estimated total £10,227.78 but the order has gone through and instead of buying 10,000 units for £10,227.78, it's actually bought 9765 units, bringing the total cost to around £10,000.

Which is what I was expecting when I submitted the quote but not what it said it was going to do........

Yeah, AJ Bell's rubbish.

hallmark

haha made me lol.  I actually find them OK tbf but that trade was definitely non-intuitive in the way the presented it.

Stargunner

wmb194 said:

hallmark said:

Looks like the AJ Bell interface is a little misleading for this. 

It quoted an Estimated total £10,227.78 but the order has gone through and instead of buying 10,000 units for £10,227.78, it's actually bought 9765 units, bringing the total cost to around £10,000.

Which is what I was expecting when I submitted the quote but not what it said it was going to do........

Yeah, AJ Bell's rubbish.

AJ Bell should also give you the option to enter quantity of shares/units rather than a monetary value. If you wanted to buy a specific quantity in the future you would be best to use that facility. 

You will receive the full six months distribution, which is due to be paid on the 7th March, which will cover the interest that you have paid.

Hoenir

hallmark said:

Looks like the AJ Bell interface is a little misleading for this. 

It quoted an Estimated total £10,227.78 but the order has gone through and instead of buying 10,000 units for £10,227.78, it's actually bought 9765 units, bringing the total cost to around £10,000.

Which is what I was expecting when I submitted the quote but not what it said it was going to do........

Did you place an order for units or a cash amount?  

hallmark

Hoenir said:

hallmark said:

Looks like the AJ Bell interface is a little misleading for this. 

It quoted an Estimated total £10,227.78 but the order has gone through and instead of buying 10,000 units for £10,227.78, it's actually bought 9765 units, bringing the total cost to around £10,000.

Which is what I was expecting when I submitted the quote but not what it said it was going to do........

Did you place an order for units or a cash amount?  

It doesn't give you an option with AJ Bell. It let's you choose account (i.e. SIPP), Buy/Sell i.e. Buy and the only order type is Market Order.

Then under that it just says Enter Value (£) with no option to toggle between value & number of units. The only other option is to include or exclude charges.

Then when you click review order, it suggests it's going to buy a number of units equal to the value (£) you entered.  But actually it buys however many units is equal to the value (£).  Very confusing!! Although not really a huge problem, more like a minor annoyance as I've had to do two orders.