Investing - Share Dealing - TradePlan
TradePlan is a service offered by The Motley Fool Share Dealing Service, which lets you take control and make the most of the rise and fall of share prices without having to monitor the markets day and night. There are five different TradePlans which can be placed on CREST eligible UK investments. These are Limit Order, Stop Loss Order, Target Setting, Range Trading and Price Locking. Setting up your instructions online is easy, and once you have done that we will take care of the rest until your order is dealt or you amend it, cancel it or the TradePlan expires.
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A limit order lets you set a price above which you will not buy and below which you will not sell investments. So if XYZ Plc's shares are currently trading at 752 pence to buy, but you’re only prepared to pay a maximum of 745 pence, you could set a limit order to buy at a maximum of 745p and the order would be dealt if the buy price of XYZ Plc's shares moved down to 745p or lower. Your order can be for a specific number of shares, or an amount of money and we'll work out how many shares that is depending on the limit price you set and taking into account the charges and stamp duty (where applicable). You can also set an expiry date for any working day in the future.
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A stop loss order lets you set a price to sell shares which is lower than the current price to protect you from sharp falls in a share price. Experienced investors would usually set a target for the profit they want to achieve and also for the loss that they’re prepared to make - a stop loss lets you control the latter. A stop loss order is used in Target Setting so scroll down to see an example of how they work. Please note, in some circumstances a share price may fall suddenly, for example when a share goes ex-dividend. This could mean that we execute a stop loss order for you that wouldn't otherwise have been dealt. We will execute the deal in line with your original instruction, which may be at a lower price than you specified by your stop loss.
For example, XYZ plc shares close at 700p on Monday night. On Tuesday, the ex-dividend date, the price opens at 670p. You have set a Stop Loss at 690p so, we'd execute your order at 670p. You should monitor your active TradePlans carefully.
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Use Target Setting to maximise profit when share prices rise and protect against losses when they fall. This TradePlan is a combination of a limit order to sell at a higher price than the current price and a stop loss order to sell at a price lower than the current price. For example, if the current sell price for your shares was 450p you could set a TradePlan to sell your shares at a limit price of 455p and a stop loss order at 447p. If the price began to rise, your TradePlan would execute at 455p, but if it began to fall your stop loss would protect you by selling your shares at 447p.
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Use Range Trading to specify the prices at which you wish to buy and sell a particular stock without the need to constantly watch share prices. It's a combination of two limit orders, one to buy shares at a lower price than the current price, and one to sell them at a higher price. For example you could set up a TradePlan to run for the next six months so that every time XZY plc's shares hit 800p you purchase a specific number of them, and then every time they reach 900p you sell them.
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Use Price Locking to track a rising share price and protect you if the price begins to fall. For example, if the current price for XYZ plc is 650p to sell you could set a 20p stop loss to sell at 630p. If the share price falls to 630p during the trading day, then your shares would be sold. If the shares rise and close at 660, your stop loss order would be increased from 630p to 640p maintaining your 20p tolerance.
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It costs £2 to set up a TradePlan on The Motley Fool Share Dealing Account and The Motley Fool ShareBuilder, but for all trades executed on that TradePlan we will reduce the dealing commission on that trade by £2. If you amend a TradePlan before it expires then another £2 charge will be made.
There is no charge to set up a TradePlan on The Motley Fool Self-Select ISA or The Motley Fool Share Dealing SIPP so there is no reduction in the commission on the trades executed.
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To set up a new TradePlan, you will need to sign in and select 'Dealing' from the left hand menu. If you have more than one account and you want to change the account, select the appropriate account from the 'Change account to be viewed >>' drop down list and click 'Go'. Select the buy or sell radio button and choose the investment you want to set a TradePlan on.
If the investment is eligible for TradePlan, the 'Set TradePlan' button will appear at the bottom of the screen. If you click on the 'Set TradePlan' button you will be taken to a summary screen showing all the TradePlans available. Select the TradePlan you require and click on 'Continue'. Complete all the details and check them carefully to ensure they reflect your requirements before submitting the TradePlan.
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To review any open TradePlan orders, you will need to sign in and select 'TradePlan' from the left hand menu followed by 'Current TradePlans' from the sub menu. If the TradePlan order has executed then the resulting deal will be displayed on the 'Dealing History' screen and the order will be archived onto the 'TradePlan History' screen.
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To cancel or amend a TradePlan order, you will need to sign in and select 'TradePlan' from the left hand menu followed by 'Current TradePlans'. If you have more than one account, select the appropriate account from the 'Change account to be viewed >>' drop down list and click 'Go'. Locate the TradePlan you want to cancel or amend and click on the appropriate icon at the end of the corresponding row.
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If you have set a TradePlan order, we will execute this as soon as practically possible if the price has been achieved. You can set a time limit of 30, 60 or 90 days or choose a specific date for your TradePlan to stop.
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Risk Warning
The value of your investments and the income from them can go down as well as up. You may not get back the full amount you have invested. If you're in any doubt about the suitability of an ISA, or whether to buy or sell shares, you should consult an appropriate Financial Adviser.
The Motley Fool Share Dealing Service is provided by Halifax Share Dealing Limited which is part of the HBOS Group. Registered in England No.3195646. Registered Office: Trinity Road, Halifax, West Yorkshire, HX1 2RG. Authorised and regulated by the Financial Services Authority, a Member of the London Stock Exchange and an HM Revenue and Customs approved PEP and ISA Manager.
The Motley Fool Limited is an Introducer Appointed Representative of Halifax Share Dealing Limited.
