Are "Negotiated Orders" safe

Ciprico

I'm trying to buy some gilts (£10k of TG31 on Iweb), and even the relatively small number of a gilts produces the comment below.. (same for TN28)

Am I exposing myself to risk, commiting to buy without any price limit or guarranty

Negotiated Order

Your order can not be completed automatically

Your order cannot be completed automatically at this time, but can still be submitted as a negotiated order. Reasons for this could include market volatility, the size of your order, or because there is not enough electronic stock available to match your order.

Because your order cannot be completed automatically we cannot guarantee the share price at the time of your trade.

Your order will be sent directly to our Dealers who will negotiate the best price available for your order in the market at that time. All orders will be completed in fair and due turn as soon as is practically possible.

Once you have placed a negotiated order you do not have the facility to cancel this instruction online.

poseidon1

Just entered an online quote from my HL isa and ii GIA accounts for a £10k trade on TG31 to see if there are any issues.

I was promptly quoted 81.627 (HL) and 81.647 (ii)  without any delay or qualification. 

 Your problem seems to be the manner in which iweb book their gilt trades. I note  in  this regard that iweb also do not offer access to new issue DMO gilt auctions which both HL and ii do and which I have taken advantage of over the last year or so.

As for risk, who can say unless you actually book a trade and see how it compares to prices quoted elsewhere ? The bid offer spread on these low coupon gilts appear very tight and intraday price movements not particularly volatile, but if you want certainty of outcomes for your gilt trades you may want to reconsider if iweb is right for you, given the alternatives.

Worth pointing out if you only hold gilts with HL no annual charges, so it is simply their relatively higher commission on trades to worry about, which might be worthwhile for the certainty of outcomes and access to  (fee free ) DMO gilt auction issues.

MK62

There's little risk from the negotiated order itself (as in iWeb won't be ripping you off)........it will usually trade close the dirty price quoted on giltyields.com.......but there will be the spread on top (basically the profit for the gilt trader iWeb buy from).....typically a few 1/10ths of a percent.
However during highly volatile trading periods there is the small possibility that the price could move significantly between you placing the order and iWeb executing it....typically 5-10 mins.......but such is the nature of live market trading.

PS.....IIRC HL charge 0.45%pa to hold gilts, but there is a max charge of £45pa. 

Eyeful

1. Anything to do with money will have some form of risk attached, its just the size and type of risk that changes.

2. Try other reputable platforms and see if they reduce the worry you are experiencing..

FIREDreamer

MK62 said:

There's little risk from the negotiated order itself (as in iWeb won't be ripping you off)........it will usually trade close the dirty price quoted on giltyields.com.......but there will be the spread on top (basically the profit for the gilt trader iWeb buy from).....typically a few 1/10ths of a percent.
However during highly volatile trading periods there is the small possibility that the price could move significantly between you placing the order and iWeb executing it....typically 5-10 mins.......but such is the nature of live market trading.

PS.....IIRC HL charge 0.45%pa to hold gilts, but there is a max charge of £45pa. 

£45 cap in an ISA
£200 cap in a SIPP
No charge in a general investment account

Enzo_L

Ciprico said:

I'm trying to buy some gilts (£10k of TG31 on Iweb), and even the relatively small number of a gilts produces the comment below.. (same for TN28)

Am I exposing myself to risk, commiting to buy without any price limit or guarranty

Negotiated Order

Your order can not be completed automatically

Your order cannot be completed automatically at this time, but can still be submitted as a negotiated order. Reasons for this could include market volatility, the size of your order, or because there is not enough electronic stock available to match your order.

Because your order cannot be completed automatically we cannot guarantee the share price at the time of your trade.

Your order will be sent directly to our Dealers who will negotiate the best price available for your order in the market at that time. All orders will be completed in fair and due turn as soon as is practically possible.

Once you have placed a negotiated order you do not have the facility to cancel this instruction online.

All gilt purchases and sales with IWeb take place in this way, for the £5 online dealing charge.

The price for TG31 isn't very volatile from minute to minute as it is a relatively short dated gilt, and the transaction will take place within the next couple of minutes after you place the order, very close to the the dirty price you were expecting.

I've made numerous gilt transactions with IWeb this year and have never had any problems.

masonic

As others have said, this is normal and in my experience iWeb executes these quickly with a low spread, so the risk of the price moving significantly after to submit the order is very small.

GeoffTF

For index liked gilts with HL, you get to speak to the dealer, which no longer happens with iWeb. HL also values index linked correctly on your quarterly statements, which is more than can be said for iWeb. HL offers better service, but with higher trading costs. Nonetheless, you could say that iWeb does the job.

masonic

GeoffTF said:

For index liked gilts with HL, you get to speak to the dealer, which no longer happens with iWeb. HL also values index linked correctly on your quarterly statements, which is more than can be said for iWeb. HL offers better service, but with higher trading costs. Nonetheless, you could say that iWeb does the job.

Though with HL, I've seen mixed accounts of whether you can trade for the online fee when buying ILG via the dealer.

While discussing other brokers, AJ Bell is worth a mention as another one who values them at the dirty price. For the account I have with iWeb, I'm happy to put up with their pricing now that I have built a calculator into my valuation spreadsheet, but it is not great to see a misleading valuation on the odd occasion I log in.

cwep2

I’ve made many gilt trades on iWeb, and they are all negotiated order now. You used to be able to ring up the dealing desk, but now effectively you are just put in a queue and they execute the deal when they can. In my experience the clean price fill is usually 0.01 or 0.02 from the mid of the quote (or from mid or eg other sources) for anything 1-3yrs, maybe 0.02-0.03 away for 5-10yrs and 0.05-0.10 away when I’ve traded TG50 which is 25yrs.

The price is almost always fine, the risk really is that they are really busy and it takes them >10mins to get around to your deal by which time the market has moved, but unless you are dealing around important economic data or the BoE meeting 10minutes is unlikely to make much difference. 

If you want to get a firm price before deciding to trade other places such as IBKR give you a firm price in up to 20-30k on which you can click and deal. 

GeoffTF

masonic said:

GeoffTF said:

For index liked gilts with HL, you get to speak to the dealer, which no longer happens with iWeb. HL also values index linked correctly on your quarterly statements, which is more than can be said for iWeb. HL offers better service, but with higher trading costs. Nonetheless, you could say that iWeb does the job.

Though with HL, I've seen mixed accounts of whether you can trade for the online fee when buying ILG via the dealer.

Here is the relevant web page:

https://www.hl.co.uk/shares/share-dealing/dealing-charges

At the end of the first full paragraph, before the paragraph that begins with an asterisk it says:

"Index-linked gilt deals made via telephone are charged at online dealing rates."

The last time that I rang, the lady who answered the phone said that I would be charged £50, and asked whether I wanted to go ahead on that basis. I said "yes, but I will make a complaint if I am charged more that the rate specified on your website." I was correctly charged £11.95. It is a good idea to check the website before phoning. So far, I have made seven trades at £11.95.

If they wanted to charge me £50 a trade, I would move my account, despite having pocketed a £1,000 bonus for transferring it in. My account may not be profitable, but it adds a sizeable amount to their Assets Under Management. I am planning to do two trades next month. If I got hit for £100 before I could move my account, I would still be well in profit with the £1,000 bonus.