Do We get Fair Execution Prices at Trade Republic for Monthly ETF saving plans?

When I started my first monthly ETF savings plan in January, I chose Trade Republic instead of my eisting trading account at Consorsbank. As written back then, I wanted to review my decision, especially the executed buy prices (spreads)…

Update Sept 2, 2020: If you think about opening an account with TradeRepublic please use my personal referral code. You and I receive € 15 each after you execute your first trade. As you can read below I like their service very much, believe their execution prices are fair and their services even improved after writing the below post.

So far, the monthly ETF savings plan was executed three times, with respective prices (end of day, intraday min & max, execution) and execution prices.

DateLPMinMaxBuy
16. Mrz.225,70 €215,00 €230,00 €229,04 €
17. Feb.311,56 €311,10 €311,65 €311,38 €
16. Jan.295,26 €294,20 €295,40 €295,28 €
16. Apr254,38 €254,00 €257,00 €254,33 €

The next execution is due on Thursday, April 16. For that day I plan to instantly compare the executed price vs current intraday market prices.

Update Apr 16: It was indeed executed at 4 pm, German time (or shortly afterwards), and it was indeed observable that prices were strengthening around or after that time (16oo – 16:30).

  • I hope, trade repuclic answers my question: When is the execution time for etf saving plans? – I have sth. in mind with around 4 pm, but let’s see.

So far, I believe execution Prices are fair.

Update: Trade Republic answered to my email, that

  • executions are intraday, within Xetra trading hours, additionally taking into account
    • the underlying index (here it is S&P 500, thus US trading Hours),
  • TR aims to execute trades at times when liquidity is highest, to Profit from lower spreads

Further Thoughts on the Topic:

From an economic Point of view, I wonder (i) if there is a statistically significant higher price at days when etf saving plans are usually executed (1st day of month, 2nd, 14th, 15th, 16th, …). If These plans are executed in the late afternoon, are there (ii) usually higher intraday prices observable in the end of day. If these effects exist, this leads obviously to the question, (iii) if these Price movements are tradeable profitable (at least for firms such as Renaissance Technologies, covered in the book The Man who Solved The Markets which I read last year)…

Best, s4v

5 thoughts on “Do We get Fair Execution Prices at Trade Republic for Monthly ETF saving plans?

  1. Hi s4v, just curious but have you checked that the volume is really higher at execution compared to other trading times? And also how is TR deciding when the liquidity is high? From the screenshots it looks like a fixed time between 16:00-16:30. Regarding my own ETF saving plan, I can say that my broker executes it in the morning (opening), but they charge a commission, so I assume they aren´t trying to profit from the spread.

    Btw I like your blog 🙂

    Liked by 1 person

  2. Hi Phlip. Thank you very much for your kind words.
    I have not checked the volume, but is volume on its own really relevant? Spread level is more relevant, right?
    In the end, its maybe a combination of volume traded and the spread levels. I will look into it in moredetail…
    So stay tuned. Or become a follower 😉

    The email from TR states that ETF savings plans are executed during XETRA times, with regard to the underlying securitites (here S&P 500) trading times (US times).
    TR tries to execute during highest liquidity, since spreads are lowest then.
    Are you from Germany? Could forward you the email from TR. Anyway, so far I am happy with TR!

    Best, s4v

    Like

  3. What do you exactly mean by first and second part?
    In general it’s clear, each firm wants to make a profit (now or an even bigger one in the future). But there are many different ways for such a profit.
    For your info: When buying some shares I compared prices at consors vs TR live, and they were pretty much the same (most of the time), but fee at consors is higher (10 EUR vs 1 EUR at TR)

    Like

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