Bid/Offer spread compared to other platforms

Hi

why does the trading 212 have greater spreads when i purchase shares. For example i tried to purchase TRY Property on HL and was getting a buy price of 3.37 per share and with Trading 212 i only secured 3.41 per share. Is this intentional?

Interesting. T212 quotes 341.30 for 100 shares. Interactive Investor quotes 337.22.

T212 is displaying buy price of 339.6p but 100 shares quotes as ~341.30 (ex stamp duty) not 339.60. Odd. See screenshot below. Will be interested to hear explanation. Is the T212 displayed price out of date?

It’s a pretty complex issue, but the short answer is that the indicative price is different to the execution price.

Our price feed comes from just one source, which looks like it’s different to HL etc. It’s purely indicative. When you place an order, it polls different execution venues - e.g exchanges, liquidity pools, MTFs and routes it to whichever offers the best price. For common, liquid stocks there is not much of a difference between the indicative price and the execution price. Once they are less liquid, this is more apparent.

We think this gives the best result for a client as when money is at stake, we aim to get you the best available deal. Other providers will show you a price offered by a single market maker to whom they route the order.

Thanks. But this doesn’t really explain to me why Interactive Investor can offer a firm quote (to be accepted within 10 seconds) that is so much less than the buy price being displayed by T212 at the same instant. Maybe you are saying that if I had actually made a market order on T212 I would most likely to have been pleased to see the fill price would be less than that shown in the app? But that begs the question why the price displayed in app is not a true reflection of the price likely to be achieved.

Also, why does app show price 339.6, but 100 shares has estimated price 341.30? I would expect them to be the same figure.

I’m not sure exactly how Interactive Investor work, but if they offer a firm quote good for 10 seconds, this is most likely an RSP (retail service provider) https://aim-watch.com/project/overview-retail-service-providers/ . This is a price from a market-maker in the stock, rather than a price from the underlying exchange. It is likely as good or better than the reference price.

If you submit a market or limit order through T212, your order is sent to multiple execution venues to achieve the best result. This might well be better than the indicative price.

So why doesn’t the indicative price match the achievable price? It derives from one source. This source may not be the most liquid for the particular stock you are looking at. It may be that there is more lquidity and hence a tighter spread on an MTF rather than the incumbent exchange.

Why is the estimated price worse than the app (‘touch’) price? Probably because there are a limited number of shares for sale at 339.6. To get 100 shares, you might have to buy 20@339.6, 20@340 and the final 60 at 342.3. This would give you an average of 341.3. Chances are thatif liquidity is reasonable, you could leave a limit order at the touch price 339.6 and get the full size, but the shares are not instantly available.

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@Richard.W The calculated cost includes stamp duty, that’s why you’re noticing a discrepancy.

As for pricing, Interactive Investor probably rely on on the RSP. We have direct market access to the LSE order book.

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