Free funds calculation wrong

So it seems free funds value is wrongly calculated

Consider the following sequence of operations:

  • Topup €10,500
  • Buy 36 shares, €77.97 each: €2,806.92 total cost
  • Buy 40 shares, €73.56 each: €2,942.40 total cost
  • Buy 25 shares, €69.08 each: €1,727.00 total cost
  • Buy 46 shares, €65.00 each: €2,990.00 total cost

Should result in €15,000 - (€2,806.92 + €2,942.40 + €1,727.00 + €2,990.00) = €33.68 free funds. However, Trading212 says my free funds value is €33.67.

I’ve contacted customer support and they say that my free funds is calculated as €10,500 - #sharesavg_share_price = €10,500 - 147€71.1995 = €33.67

Obviously taking the average share price is susceptible to rounding issues and should not be used to calculate free funds.

While we’re just talking about a €0.01 error, I find this concerning and reflects badly on how Trading 212 keeps track of the investments and accountancy, having me thinking whether I can trust this broker moving forward.

An incidence has been created and hopefully this will get fixed, but wanted to give some visibility to the issue.

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forgive me for being blunt, but you are nitpicking over something that seems a tad ridiculous.

shares can have a really odd string of numbers past the decimal that doesn’t always round nicely and the FX rate itself also gets considered to the 8th decimal place.

you have used very solid numbers to arrive at your result, however the system has a more accurate record to calculate its result. the difference of €0.01 is due to these rounding differences and naturally you cannot spend a unit of currency you don’t fully possess.

The trustworthiness of T212 is not in doubt. they have a long history in the industry and are approved by financial regulators. Your free funds are held by a 3rd party and thus naturally cannot be abused, this also means that fund balances can only be real units of currency and not accurate to the decimal place.

3 Likes

I’m sorry to disagree.

shares can have a really odd string of numbers past the decimal that doesn’t always round nicely and the FX rate itself also gets considered to the 8th decimal place.

This is not the case. Shares were bought with limit orders and prices were exactly the ones I posted. All operations were made in € so no FX conversion is involved.

however the system has a more accurate record to calculate its result.

I’m happy to be proven wrong, but so far what I see is that they calculate my free funds value taking the average purchase price , instead of subtracting my previous free funds value form the last operation made. I can’t see how that’s more accurate.

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@diegos It’s a rounding thing, the funds aren’t actually missing. The average share price is rounded from 71.19945578231293 to 71.1995. Obviously, displaying the 1st number wouldn’t be very nice.

I think that with other brokers you also lose the odd €0.01 from time to time because of rounding, except that it not so transparent - they round up the cost of the shares. I have seen a number of £0.01s disappear from my free funds balance after making trades - but it is more than compensated for by the fact that I am trading with no fees.

It’s a rounding thing, the funds aren’t actually missing. The average share price is rounded from 71.19945578231293 to 71.1995

@David, I understand the rounding about the average purchase price, I don’t care about that, since that should be only informative. But I can ‘only’ withdraw €33.67 instead of €33.68 from my account. I’d expect a brokerage service to be extremely accurate and rigorous with money accountancy.

Actual balances in any bank account (your current account, savings, and so on) are not in two decimal places but in a floating number with more decimal places. The two digit balance is always rounded, as result, even when you buy a share, you might have paid a different amount. For example, as you said to have bought 36 shares at 77.97€ each and spent in total 2,806.92€, you might actually have spent something like 2,806.9244444€ which rounded to two decimal places is 2,806.92€ even if you have paid a little more. Same might have happened with all the other shares you bought, resulting in a different balance then expected as you have used the rounded total cost instead of the actual cost.

@arafath98 that all makes sense, but it’s not the case here :slight_smile: