Order Execution policy

Version 2.2, July 2020

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Freetrade Limited (“Freetrade”, “we”, “our”, “us”) will carry out orders instructed by you, as a retail client, in accordance with this policy. By placing an order through our mobile application you acknowledge and accept this.

We’re committed to taking all sufficient steps to achieve what is known as “best execution” for your orders. Best execution depends on a range of factors, which can sometimes conflict or overlap.  These are the factors involved in getting you the best possible execution result.

Factors in best execution

The most important factor is the price of the stock or ETF you want to deal in. We want to keep the overall costs of the transaction as low as possible!

If necessary, we may also at our discretion take into consideration:

The length of time it might take to complete the deal.

The likelihood of being able to place the deal and settle it.

The size of the deal.

In carrying out your orders we rely on the services of a number of markets and their member firms, retail service providers and market makers. We review these parties regularly to ensure that we’re sourcing quotes from the widest possible selection of key market participants that we deem necessary.

Deals in UK-listed instruments are passed through our dedicated routing system. Here, quotes are automatically obtained from various sources and your deal is conducted with the venue or counterparty providing the best price available at that time.

Orders for US-listed securities may be transmitted to our third-party US-based broker-dealer (“Our US Broker”):

·   Orders for fractions of a security will be executed by Our US Broker, as principal.
·   Orders for full shares of a security will be executed by Our US Broker, as agent. Our US Broker will seek quotes and execute orders, as agent, on a number of execution venues, including US executing brokers and US trading venues.
·   Where your order includes both a whole share and fraction of a share, it will be executed in a mixed capacity by Our US Broker.
·   In all cases, Our US Broker commits to execute at the National Best Bid or Offer (“NBBO”) as of the time of your order, for all whole share and fractional share components of a transaction, in line with its best execution objective.

We may execute your orders outside of a European regulated trading venue. This would include where your orders are executed with our US broker, a US executing broker or on a US trading venue.

Under the FCA rules, we are required to obtain your prior express consent before we arrange for an order to be executed outside of a European trading venue. By consenting to this Order Execution Policy you express your consent to us arranging for your orders to be executed outside a European Regulated Market, MTF or OTF.


Types of order

We offer a number of different order types:

Basic Order

If you decide to place an Instruction outside of the available trading hours for a Security, you will place these Instructions using our Basic Order type. Please be aware of the following features and risks:

A Basic Order will be executed shortly after our Cut-Off Time for the respective market (see our Terms and conditions for more details). For example, in London this will be from 15:00 local time during every normal trading day. Other markets may vary. The relevant and most up to date Cut-Off Time will be shown in our mobile application.

You can cancel a Basic order in our mobile application up to the relevant Cut-Off Time.

If you place a Basic Order after the Cut-Off Time such that it is not executed on that day, your order will be valid for the next trading day only and will be queued for execution on that day. During the available trading hours for a Security, Basic Orders will not be available.

The price at which a Basic Order is executed will depend on the prevailing market price at the time the trade is executed. This may work to your advantage or disadvantage due to the inherent nature of a moving market.

You should be conscious to accept the risk associated with this type of instruction. Freetrade will not be liable for losses incurred due to the selection of the Basic Order type, save any assessment made by us that we have fallen short of our best execution obligations.

Dependent on the prevailing market price at the time of execution, the full amount instructed may not be invested. If the instruction exceeds the amount of available cash in your account, we will automatically lower the number of shares purchased accordingly. Any surplus will be returned to your account in the form of cash.

Instant Order

Also commission-free is our Instant Order option which executes instantly, and again there are risks:

An Instant Order is an order to buy or sell at the best price available to us in the market at that time.

You may only place an Instant Order when the respective market is open. For example, in London this will ordinarily be from 08:00 until 16:30 local time during every normal trading day. Other markets will vary.

You cannot cancel an Instant Order on account of it being executed as fast as possible after instruction.

Due to the inherent nature of a moving market and any delays in displaying information through our mobile application, it is likely that the actual execution price will differ from that shown on screen before the order is made.

You should be conscious to accept the risk associated with this type of instruction. Freetrade will not be liable for losses incurred due to the selection of the Instant Order type, save any assessment made by us that we have fallen short of our best execution obligations.

Your order, regardless of type, will only be carried out if all of the required shares are available to be purchased in the market, i.e. your order will never be partially filled. This is known as ‘Fill or Kill’. Catchy name.

Triggered Order

A Triggered Order is an instruction to submit:

a buy order when the observed price during normal market hours falls to or below the Trigger price set by you (a Triggered Buy Order);

a sell order when this observed price rises to or above the Trigger price set by you (a Triggered Sell Order);

or a sell order when this observed price falls to or below the Trigger price set by you (a Triggered Stop Loss Order).

You can only cancel a Triggered Order (of any type) up until the point it is triggered.

Once the order has triggered, it is not possible to cancel.

Where a Triggered Order executes, the actual execution price you receive may be higher or lower than the Trigger price due to market prices moving between an instruction triggering and the order executing, or due to differences between prices published in data feeds and the price at which our market counterparties or other market participants available to us are willing to execute a buy or a sell order.

If the observed market price reaches the Trigger price you set, it will not always mean that your order will be sent or executed, for example, due to differences between price data and the prices at which our market counterparties or other market participants available to us are willing to buy or sell.

You should be conscious to accept the risk associated with this type of instruction. Freetrade will not be liable for losses incurred due to the selection of the Triggered Order type, save any assessment made by us that we have fallen short of our best execution obligations.

Limit and Stop Loss Order

A Limit or Stop Loss Order is an order to:

buy at a price equal to or below the Limit Price set by you (a Buy Limit Order);

sell at a price equal to or above the Limit Price set by you (a Sell Limit Order);

or sell at a price equal to or below the Stop Price set by you (a Stop Loss Order).  

You can only cancel a Limit or Stop Loss Order up until the point it is triggered.

Once the order has triggered, it is not possible to cancel.Buy Limit Orders and Sell Limit Orders will only execute at or better than the Limit Price set by you.

Stop Loss Orders will not necessarily execute at the Stop Price set by you and will often execute at a lower price, due to the inherent nature of moving markets and the price at which our market counterparties or other market participants available to us are willing to buy at that time.If the observed market price reaches the Limit Price or Stop Price you set, it will not always mean that your order will be executed, for example, due to differences between price data and the prices at which our market counterparties or other market participants available to us are willing to buy or sell.

You should be conscious to accept the risk associated with this type of instruction. Freetrade will not be liable for losses incurred due to the selection of the Limit or Stop Loss Order types, save any assessment made by us that we have fallen short of our best execution obligations.

Your order, regardless of type, will only be carried out if all of the required shares are available to be purchased in the market, i.e. your order will never be partially filled. This is known as ‘Fill or Kill’. Catchy name.

Order allocation

Where Freetrade considers it necessary and in our customers’ best interests, we may aggregate (i.e. combine together) multiple orders. We don’t invest our own money, so your order will never be combined with one of ours. Where your order is aggregated, we will subsequently allocate the correct portion of the order to your account in the form of shares or cash.

You should be aware that aggregating orders in this way may be to your disadvantage. Because your investment may be bought or sold alongside the shares of other customers, the price obtained may not be the same as if it had been an individual order.

The market may also offer a different price due to the larger number of shares being bought or sold at once. The price you pay or receive could, therefore, be higher or lower than if your shares had been bought or sold as an individual order.

Monitoring and review

Freetrade undertakes to monitor execution performance for compliance with this policy, as well as periodically reviewing the policy itself to ensure that we are delivering the best execution results for our clients. We will let you know about any important changes being made here.