TD Waterhouse

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Brandycreek

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Hi have just opened a trading account with TD Waterhouse but after reading some posts on this forum am now starting to wonder if they are too expensive, especially for day trading. They charge £12.50 a trade so a buy sell would cost £25.00. Higher volume price is £9.99 so still around £20.00. Plus of course UK taxes. Anyone else use them or know anything about them? Im wondering if I should close this account before I start. Are there any better (sound) alternatives for someone in the UK.
 
Ok, so I'm a newbie as the title suggests. Would like to hear from more experienced members if that is a fair/good/average price for trades. I thought I saw posts from others on these forums that were suggesting they paid a whole lot less. Am I mistaken? It's just I thought I saw someone post they paid $3.50US per trade which is a huge difference. Was I just dreaming?
 
UK equities. Its just that many on the net have suggested when starting out to start small with trades of 50-100 to get a feel of things. Even TD Waterhouse in their explanations say that you may put a bid in for 100 shares and only get 50. Doing my sums, if I purchase 50 or 100 shares of stocks I'm interested in, then £20-25 is a big chunk of their value and there goes any profit. Of course the answer is buy more stocks. But why do so many give advice to start by buying small amounts? I've also seen clips on you tube with day traders doing trades at home making small profits on trades that obviously add up nicely. But tehy must be paying a whole lot less per trade or there would be no profit.
 
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For physical equities, £12.50 doesn't sound way out.If you're day trading then the execution you get is likely to be more important than a few quid on the commission. However if you're only buying 50 share at a time, I doubt that you'll ever make money; the price will have to move too far for you to break even. I'm not suggesting you buy more - if you're learning this would be a real mistake. Have you tried a CFD demo account? Ignore the funding, and just buy the same number of shares as you would physcially. This will give you a feel for the markets without the com. Following this, find a CFD broker (or SB provider) which doesn't demand a high minimum commission and allows you to trade in small size. Even if some of the prices aren't as tight as the market you may find this outweighs the com you'd pay. Don't be tempted by any of the other products unless you're totally comfortable with the risks.

Once you're happy in small size, you could move to TD or similar and trade in sizes large enough to overcome the com.
 
Thanks for your replies, as yet I haven't tried a dummy account, but it was easy to see that with the commission there was no way a profit was to be had by trading small quantities. As someone else has quoted on another T2W thread, profit= capital x risk x time. Can I ask a real newbie question and ask what execution refers to? I'm just guessing it means the speed at which your request is processed?
 
Execution refers to the time and price at which your order is processed (aka filled). If a share price is quoted 320p - 321p you should be able to pay 321p without issue. A good broker may be able to get inside the spread and buy the shares at 320.75p. If the price is moving quickly, a delay in the order means you may buy at 321.5p. If you're looking to make small gains on each trade rather than position trading, good execution is worth paying for.
 
If you're only looking at buying/selling 50-100 shares a time I sould recommend you try a spread betting company. TD Waterhouse offer spread betting. Alright the spread are a little wider and you have to pay a rolling daily charge for daily bets but that's about it.

buying 100 shares is equivalent to going £1 per point on the share. E.g. if the price goes up 1 point you make £1 if it goes down 1pt you lose £1.

So a rough example is this.
with TD waterhouse Spread betting BP as a bid-ask price of 396.3-396.9. That's a 0.6 spread. If you went long at £1 per point you would probably pay £0.01 per day rolling charge. For this trade to end up costing you £12.50 in charges it would mean you would have to keep the position open for over three years.

With spread betting you can go long and short depending on your prefernce. Also with spread betting you only require part of the capital.

E.g. to buy 100 shares in BP at 396.9 = £396.9 required. With TD waterhouse I think you only need to have £10 in your account to go £1 per point on BP.
also one of the other benefits of spread betting is you can place stop & limit orders.

E.g. you by BP at £1 per point at 396.9 and you only want to risk say £50 on the trade. You can set an stop order at 346.9 (so 50pts away from your buy price) A stock broker will probably charge you to add a stop order with a spread betting company it's free.

Anyway I've rambled on enough. Obviously I'm a fan of spread betting. I think if you only want to start small trading 50-100 shares then spread betting is your best option.

If you google SpreadBettingBeginner all as one word, you ,might find this useful. I can't say too much as I've already had a warning.

Trev,
The Spread Betting Beginner
 
Can I ask what you have a warning for? what are you not allowed to say? Just interested because I dont have a clue as to what wouldnt be allowed.
 
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