So I’m new to Trading 212 and was wondering if anyone could help me out/shed some light on the issue I’m having.
I recently purchased a number of shares and as I received a notification to say it was executed, I simultaneously got a notification stating some of those shares had been sold on my behalf due to negative balance protection. This has confused me as the market was not open for a number of hours so how could they protect me against something that has not potentially already happened?
For some context, around one fifth of my shares were automatically sold putting me at a big loss before the market has opened.
As well as this, my funds within the app are now all wrong and showing amounts of GBP that I had not deposited at any time.
Forgive me if I’m being ignorant, but any answers would be greatly appreciated.
Really screwed me over with this annoyingly as the stock shot up at opening as I predicted, but this only left me with £30 profit instead of the £150ish I was hoping for.
I am not sure how your order was executed in the pre market as I though it wasn’t available for Invest accounts.
Looking at todays trading data some stock did trade at $0.413 at 1:03pm today.
But once the market opened at 2:30pm the high was only $0.38.
I assume they let you place the trade using a calculation based off a price from yesterday which would have meant £500 would have been enough to buy 1861 shares.
But as the stock gapped up when premarket opened this cost $0.413 a share which is $768.53/~£577.
So you effectively had a negative balance of £77.
To clear the negative balance 301 shares had to be sold at the sell price of $0.33991. Which comes to $102.32/~£77
You are then left with 1861 - 301 = 1560 shares
The share price closed at $0.38 which means you are left with 1560shares x $0.38 price = $592.8/£445
So effectively the trade has resulted in a loss of £55 (£445-£500) if you were able to sell the shares at $0.38
What I would say is you shouldn’t place market orders on OTC markets as the spreads are wide. Also OTC markets in general are places where the junk companies live so best avoided completely IMO.
Maybe T212 also need to refine their system so it doesn’t allow market orders to buy when markets are closed so gaps don’t result in the situation of someone ending up with a negative balance temporarily.
I had a similar thing with a limit order set. It missed my limit price as the stock shot up. I couldn’t cancel. Price came down well below my limit price and it bought at my top price but was immediately 25% down. That also showed some buying/selling to protect from negative price.
Similar thing with a limit order that never went through, bought something else so I had no free friends in the hope it didn’t buy those shares as they were then falling 30 mins later (buy was still pending). That bought and sold despite me not having any free funds. Says I lost about £30 on the buy/sell but not sure where that money came from/went if I had £0 free funds
