Easy Equities spread

SafariTin

SafariTin

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I know there is a EE thread, but I'm not reading 105 pages to find a vague answer to a very specific issue.

I was buying STXWDM in my TFSA now. Market price is R43.22 - I got 399 shares for R17,985 = R45.07 per share. That is a spread of approx R1.85 resulting in spread cost of R740.

I think this is my 4th trade on EE and the first time the issue is as pronounced.

Is this a common issue?
Is there some way to mitigate it?

My gut says it is still cheaper than a stockbroking account, but it still feels wrong. Thoughts?
 
Ouch. This has happened to me before.

It's likely to happen if you buy early in the morning. Lack of liquidity until market maker shows up. Not exactly sure what time is safe to buy so I just buy after 10:30 and that has been working for me.
 
I read the same thing as what is quoted and when you buy actually may differ. A HUGE thing related to the "3 prices" on their site.

If you gonna stick it for the long term, its a good buy without any fees.

I see that Satrix moved to the same platform as EE. But EE dont charge any fees, where the same fund with SatrixNOW charges an ongoing fee.
 
Checked now and EE price is R43.99, market is R43.71 - so spread of 28c which is more acceptable.

This issue makes no sense and I feel cheated.
 
If you ever bought crypto this might make sense. There is a "simple purchase" option and an order book.

If you select simple purchase it will take your R100 and buy the first available units to match your R100. This typically costs mores per "unit" order book on the other hand allows you to buy item buy per item, so you might buy R50 wait a while till price is what you want and buy more.

Not sure if EE works like this.
 
You can call EE and query the transactions. I had a similar issue they reversed the transaction but it took about 2 weeks
 
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Eti1 said:

Before the market maker enters the market, there can be wild swings in etf price.

I heard/read somewhere that the market maker for jse etfs stieks uit around 9:45am. But with easy equities 15 minute delay, I buy at 10:30 to be sure things have settled down.
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This is what I meant similar to the crytpo exchanges. I am always a market maker in your case you sound like a market taker and you basically take whatever is available. Hence the "premium" you pay.

www.cmegroup.com

Market Makers vs. Market Takers - CME Group

Look at the two different kinds of traders: market makers and market takers, and how there trading patterns differ.
www.cmegroup.com www.cmegroup.com
 
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Buying ETF tip :

Don’t buy any ETFs before 09h30 in the morning. Before then, sometimes the market maker of some ETFs have still not had their coffee, and might be half asleep. This means the spread on the ETF can be large, and you end up overpaying for the ETF. After 09h30 this won’t happen.
 
PhreakBoy said:
Checked now and EE price is R43.99, market is R43.71 - so spread of 28c which is more acceptable.

This issue makes no sense and I feel cheated.
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What "Market price" though because there are many.
  • Last traded price - the price for the last complete trade
  • Bid price - the current highest price that someone is wiling to buy for that has not been settled
  • Offer price - the current lowest price that someone is willing to sell for that has not been settled
  • Mid price - average of the bid and offer prices
  • And if you are looking at the free pricing, most of these are displayed as they were 15 minutes ago rather than current
Of all those prices, only the current bid and offer prices are actually tradeable so it's actually impossible to buy at the mid price which is often what is quoted as market price. And if last traded price is quoted as market price then it may be possible to trade at it but only in 1 direction (only buy or only sell, not both) and even that is only in certain circumstances.

The spread between last traded or mid price (both are often referred to as market price) and what you can actually buy or sell for right now can be quite large depending on the specific instrument and how many other people want to buy or sell. This effect is exaggerated by using 15 minute delayed pricing.

Additionally, as far as I know, EE executes trades at current ruling bid or offer prices depending on whether you are buying or selling and you can't set the price you want. For example:
  • You want to buy 200 shares of X
  • X's 15 minute delayed market price is R50
  • Current offers are 100 shares at R51 and 200 shares at R52
  • EE will execute 100 shares at R51 and another 100 shares at R52 giving you an average price of R51.50 for your 200 shares even though the "market price" is R50. Then you need to add all the other costs like STRATE fees etc so it is quite likely that (even if EE take no spread) you can end up paying significantly more than "market price" depending on both the bid-offer spread as well as how much prices have moved since the 15 minute delayed market price that you are looking at.
 
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Jehosefat said:
What "Market price" though because there are many.
  • Last traded price - the price for the last complete trade
  • Bid price - the current highest price that someone is wiling to buy for that has not been settled
  • Offer price - the current lowest price that someone is willing to sell for that has not been settled
  • Mid price - average of the bid and offer prices
  • And if you are looking at the free pricing, most of these are displayed as they were 15 minutes ago rather than current
Of all those prices, only the current bid and offer prices are actually tradeable so it's actually impossible to buy at the mid price which is often what is quoted as market price. And if last traded price is quoted as market price then it may be possible to trade at it but only in 1 direction (only buy or only sell, not both) and even that is only in certain circumstances.

The spread between last traded or mid price (both are often referred to as market price) and what you can actually buy or sell for right now can be quite large depending on the specific instrument and how many other people want to buy or sell. This effect is exaggerated by using 15 minute delayed pricing.

Additionally, as far as I know, EE executes trades at current ruling bid or offer prices depending on whether you are buying or selling and you can't set the price you want. For example:
  • You want to buy 200 shares of X
  • X's 15 minute delayed market price is R50
  • Current offers are 100 shares at R51 and 200 shares at R52
  • EE will execute 100 shares at R51 and another 100 shares at R52 giving you an average price of R51.50 for your 200 shares even though the "market price" is R50. Then you need to add all the other costs like STRATE fees etc so it is quite likely that (even if EE take no spread) you can end up paying significantly more than "market price" depending on both the bid-offer spread as well as how much prices have moved since the 15 minute delayed market price that you are looking at.
Click to expand...

Thank you for the long and very detailed explanation, but respectfully, you are wrong on many of your assumptions.

1. The spread on a well traded ETF like STXWDM is rarely (if not never) 4% - I fully agree with you that a few cents on R43 is possible, but not R1.85 - take note ETF, not single share.

2. The published 15 minute delayed price on whichever website I use for reference should be very close to the 15 minute delayed price on EE, as both are delayed by 15 minutes.

3. EE bulk up orders and do not execute trades as per your 100 shares at R51 and 100 shares at R52 example. The R17,985 I quoted is the price excluding all fees. The fees on the trade was R15.56, bringing the total to R18,000.56

From your response it does not seem as if you've ever used Easy Equities.
 
PhreakBoy said:
Thank you for the long and very detailed explanation, but respectfully, you are wrong on many of your assumptions.

1. The spread on a well traded ETF like STXWDM is rarely (if not never) 4% - I fully agree with you that a few cents on R43 is possible, but not R1.85 - take note ETF, not single share.
Click to expand...
I get live pricing on my stockbroking platform and sometimes the spreads are a lot wider than you would think. I agree that in general they would not be that wide but "in general" is not the same as "never". The very large spread this morning may just have been bad luck. It's hard to say without the actual price quotes for when the trade was executed.

PhreakBoy said:
2. The published 15 minute delayed price on whichever website I use for reference should be very close to the 15 minute delayed price on EE, as both are delayed by 15 minutes.
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The 15 minute delayed prices are provided by the JSE so they should be the same across all platforms assuming they are for the same point in time. What might differ is which of the particular prices are actually displayed e.g. last traded vs mid.

PhreakBoy said:
3. EE bulk up orders and do not execute trades as per your 100 shares at R51 and 100 shares at R52 example. The R17,985 I quoted is the price excluding all fees. The fees on the trade was R15.56, bringing the total to R18,000.56

From your response it does not seem as if you've ever used Easy Equities.
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If they wait and do bulk trades then you could be subjected to even bigger price fluctuations while they wait to get the minimum order number together to actually execute the trade. Either way, the trade would have to be executed at the available volumes and offer prices regardless of whether it was your specific trade or a bulked trade.

No, I haven't used EE but most of what I posted was about how the stock market works and not specific to EE but applies equally to all participants.
 
Jehosefat said:
I get live pricing on my stockbroking platform and sometimes the spreads are a lot wider than you would think. I agree that in general they would not be that wide but "in general" is not the same as "never". The very large spread this morning may just have been bad luck. It's hard to say without the actual price quotes for when the trade was executed.


The 15 minute delayed prices are provided by the JSE so they should be the same across all platforms assuming they are for the same point in time. What might differ is which of the particular prices are actually displayed e.g. last traded vs mid.


If they wait and do bulk trades then you could be subjected to even bigger price fluctuations while they wait to get the minimum order number together to actually execute the trade. Either way, the trade would have to be executed at the available volumes and offer prices regardless of whether it was your specific trade or a bulked trade.

No, I haven't used EE but most of what I posted was about how the stock market works and not specific to EE but applies equally to all participants.
Click to expand...

Exactly, you've given me a general response (which frankly seemed a bit condescending) when I asked about a specific issue that you have no experience with.
 
I usually use the demo account on EE to buy/sell whatever before using my "real" account, just to see what things are currently going for.
 
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