Trading Analysis - 8th April 2019


8 April 2019

The first day of the new tax year led to unprecedented numbers of Bed&ISA trades being executed. To the uninitiated these may have all looked like sells, being pinned to the advertised Bid price, so as to yield the largest possible transfer of shares into the tax-free ISA wrapper.

Monday, 8th Apr 2019

I have counted approximately 40 combined Bed&ISA trades, 1 Bed & SIPP (£40K at the Bid) and  a number of apparent manual Bed & ISA transfers - where the holder is prepared to accept the somewhat larger spread (potentially up to 0.5p) in preference to getting their broker to undertake a combined Bed & ISA trade. As will become apparent this is most definitely not optimal, and also converts fewer shares than a combined Bed & ISA which invariably takes place right at the bottom of the Bid level.

There is also one interesting set of trades which appears to be someone selling £40K worth down to cash followed by investment of £20K in their account and then another £20K into what we must assume is their spouse's ISA :-

Note how the spread on each of these is Buy-Sell combinations is only 0.025p - this is exactly half of the next lowest spread observed for the more conventional Bed&ISA Sell then Buy trade pairs - whoever's trades these are they did very well to get all this done quite so cheaply.

For pretty much the entire day £20K Bed&ISA's were afforded a 0.05p spread - effectively a £30 cost - so anyone yet to undertake their Bed&ISA's but wishing to do so tomorrow might wish to check that they are getting spreads close to this level for their Bed&ISA transaction. Let your broker know you know the score.

Despite the huge number of Bed&ISA pairs, which of course had little impact on the overall nett Trades position, the balance of trades ended strongly positive - with around 464,000 more Buys than Sells over the day.

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