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How to sell 53036 Barclays Shares?

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mattman74
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How to sell 53036 Barclays Shares?

#129405

Postby mattman74 » April 2nd, 2018, 8:43 am

My Wife has just inherited 53036 Barclays Shares.

A nice problem to have.

My first reaction was horror in having so much tied up in one company - so sell asap due to company risk.

However the stock broking firm the probate solicitor has quoted wants £791 for this service (basically a % of the value)!
(Probate has now come through)

I am used to buying & selling shares via a nominee account so £10 or so fixed fee.

Surely a cheaper way to do it would be to transfer the shares to her Halifax Sharedealing Account.
Then sell for £12.50. This would probably take some time

Am I missing anything here?
Will Halifax take the business?

Is wanting the risk reduced asap a sensible reason to get fleeced for the high dealing cost or do we take the risk of waiting a few weeks and selling cheaply.

Any thoughts from more experienced heads is very welcome,

Matt

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Re: How to sell 53036 Barclays Shares?

#129407

Postby swill453 » April 2nd, 2018, 8:59 am

If you weren't going to immediately sell them, how is the probate solicitor proposing to transfer them to your wife? And when? And are any charges involved?

Scott.

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Re: How to sell 53036 Barclays Shares?

#129411

Postby PeterGray » April 2nd, 2018, 9:14 am

The proposed commission is actually about 0.75% of the trade, which is the normal sort of range for what a full service broker would charge - so not unreasonable in terms of what the probate solicitor would charge.

However, you could as you say clearly sell them for a lot less via an execution only broker. To do that you would need to get them distributed in certificated form - which might well be charged for itself and then open an account and transfer the certificated shares to that before selling and withdrawing the cash - assuming that's what you want to do. That would be easy to do, and you wouldn't have a problem.

But it would be worth checking what you would end up paying to receive the certificate - you may end up with more work and not much less cost!

Peter

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Re: How to sell 53036 Barclays Shares?

#129413

Postby johnhemming » April 2nd, 2018, 9:20 am

The question as to whether this is a good time to sell them (and the price you would get) is perhaps more significant than the commission paid for selling them.

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Re: How to sell 53036 Barclays Shares?

#129414

Postby Alaric » April 2nd, 2018, 9:24 am

PeterGray wrote:To do that you would need to get them distributed in certificated form - which might well be charged for itself and then open an account and transfer the certificated shares to that before selling and withdrawing the cash - assuming that's what you want to do. That would be easy to do, and you wouldn't have a problem.


Regardless of whether you intend to sell, which is none of the business of the probate solicitor, how did they propose to transfer the shares to your wife's name? If there's already an account in existence, can they not be transferred directly?

mattman74
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Re: How to sell 53036 Barclays Shares?

#129415

Postby mattman74 » April 2nd, 2018, 9:26 am

Scott

As far as I can tell there are no charges transferring the shares to my wife - just fill in a form for the share registrar equiniti.

(Interestingly - they will sell them for a 1.9% charge!)

It is just I am confused as to the disparate charges between low cost nominee accounts (eg Halifax £12.50 sell cost) and a professional stockbroker (£791). I am sure wiser heads know why this is.

I suppose I would like people's views on taking the (small) risk of Barclays crashing in the next few weeks against getting fleeced by dealing charges. I really do not understand the disparity in the charges.

Any views welcome

Matt

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Re: How to sell 53036 Barclays Shares?

#129421

Postby mattman74 » April 2nd, 2018, 9:41 am

Peter Yes the .75% charge - seems what other full service stock brokers would charge
so - it is worth checking with Halifax about the cost of transferring in

John - you are quite right about the daily variance in the price being just as significant but we have no control over that.

Alaric - I had not thought about just getting the solicitors to transfer them directly to my wifes halifax share dealing account.

Thanks for your comments - they are a way of crystallising a view.

I am starting to think that the "best" (cheapest) way of doing this is not worth the hassle of the £750 ish saved in the context of the variation in the daily share price. (If it drops 1% (2p) tomorrow we lose £1060. If it rises 2p, we gain £1060).

There is no perfect solution - so just do it.


Matt

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Re: How to sell 53036 Barclays Shares?

#129425

Postby johnhemming » April 2nd, 2018, 10:13 am

mattman74 wrote:John - you are quite right about the daily variance in the price being just as significant but we have no control over that.

There are also questions at times as to what price a broker can get. However, Barclays is a very liquid stock so there should not be a problem there.

Barclays had some good news in the USA on Thursday. Where exactly their price will go is not clear, but you do have the option, of course, of selling some of the shares and keeping some potentially to sell later or because of the dividend income. (which should go up after the news from the USA on Thursday).

GeoffF100
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Re: How to sell 53036 Barclays Shares?

#129427

Postby GeoffF100 » April 2nd, 2018, 10:20 am

I do not believe it makes much sense to pay 0.75% to sell the shares. i would transfer them to the Halifax account. It is likely to take a week or two. The market is as likely to move in your favour as it is against you during that time, so I would just take the risk. You could hedge against this risk with a CFD short position. IG Index appears to be the largest CFD provider:

https://www.ig.com/uk/cfd-trading?CHID= ... 02091105:s

These people may be cheaper for your purpose:

https://www.plus500.co.uk/Trading/Stocks

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Re: How to sell 53036 Barclays Shares?

#129461

Postby GeoffF100 » April 2nd, 2018, 12:02 pm

Here is the page for Barclays on Plus 500:

https://www.plus500.co.uk/Instruments/BARC-L

There is no commission and the spread is 0.19%. Daily funding is at 0.0261%. This is nearly 10% over one year, but over 14 days it works out as 0.00366%. You take out a short position that is equal and opposite to your long position in the Barclays stock. Each percentage fall in the stock is counter balanced by a percentage rise in the CFD short position, and vice versa. The initial margin for the CFD position is 10%, which works out at 5303.6 x 206.65 = £10,959. You have to deposit that margin up front, and more margin if the share price rises by more than 5%.

The total cost should be about 0.2%, which is much cheaper than 0.75%.

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Re: How to sell 53036 Barclays Shares?

#129497

Postby Lootman » April 2nd, 2018, 1:45 pm

GeoffF100 wrote:I would just take the risk. You could hedge against this risk with a CFD short position. IG Index appears to be the largest CFD provider:

https://www.ig.com/uk/cfd-trading?CHID= ... 02091105:s

These people may be cheaper for your purpose:

https://www.plus500.co.uk/Trading/Stocks

Yes, that is what I would do - hedge the risk whilst you do the transfer. I know of two people who took a big loss while their hands were tied with a large concentrated position like that.

I'd probably use a put option though - maybe on the Barclays ADRs for liquidity reasons.

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Re: How to sell 53036 Barclays Shares?

#129505

Postby GeoffF100 » April 2nd, 2018, 1:59 pm

The Exchange Market Size for Barclays is 10,000 shares. You could sell them online at quote in six batches (or perhaps rather less) with Halifax, which is still a lot cheaper than a full service broker. Halifax will execute trades over market size "at best", but you could get a rotten price. It would be a good idea to contact them. A full service broker may not get a great price either, but they ought to put in more effort for the fat commission that they are receiving.

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Re: How to sell 53036 Barclays Shares?

#129520

Postby BobbyD » April 2nd, 2018, 3:03 pm

I either got a share cert automatically or without charge on request from the broker (equiniti) when I inherited a more modest Barclays holdings. Can't remember which. What I do remember is the solicitor sitting on the share certs until he had them all to send out in a single envelope. This was in 2008. I now have a new solicitor.

https://www.home.barclays/barclays-inve ... store.html

If they are lodged with the registrar, the other alternative would be to sell them straight through equiniti at £12.50 a trade.

https://www.shareview.co.uk/4/Info/Port ... hares.aspx

Worth bearing in mind that in the unlikely event Halifax eat dirt in the interim you are going to push the Hali ac count well over the FSCS limit.

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Re: How to sell 53036 Barclays Shares?

#129528

Postby GeoffF100 » April 2nd, 2018, 3:36 pm

There may well be trade size problems with CFDs too, but you can probably get round that by splitting the trade. Again, it would be a good idea to ask.

Buying deep in the money put options is a good idea in principle, but that would be more difficult for the OP, even using UK based options. To buy put options on an ADR, I expect that he would need to open an account with an American broker and fund it with dollars.

I do not believe that HSDL is likely to crash any time soon. It would be very embarrassing for Lloyds Bank if it did, and they would almost certainly bail it out. Your money is likely to be more at risk with a full service broker.

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Re: How to sell 53036 Barclays Shares?

#129558

Postby supremetwo » April 2nd, 2018, 5:40 pm

mattman74 wrote:My Wife has just inherited 53036 Barclays Shares.
My first reaction was horror in having so much tied up in one company - so sell asap due to company risk. Matt

The shares will be valued at probate date and subsequent gains could come (or batch sold to come) under the CGT annual allowance.

As others have said, I'd not be in a hurry to sell now:-

http://www.hl.co.uk/shares/shares-searc ... -forecasts

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Re: How to sell 53036 Barclays Shares?

#129561

Postby Lootman » April 2nd, 2018, 5:47 pm

GeoffF100 wrote:Buying deep in the money put options is a good idea in principle, but that would be more difficult for the OP, even using UK based options. To buy put options on an ADR, I expect that he would need to open an account with an American broker and fund it with dollars.

You do not need a US broker to trade ADRs. Just a UK broker that both allows trading in US shares AND allows you to buy options, which would not require a margin account.

But yes, funding would be in dollars.

Options on Barclays UK shares would be simpler, I'd agree, but I doubt that the liquidity is there beyond the near month.

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Re: How to sell 53036 Barclays Shares?

#129565

Postby GeoffF100 » April 2nd, 2018, 6:24 pm

Lootman wrote:You do not need a US broker to trade ADRs. Just a UK broker that both allows trading in US shares AND allows you to buy options, which would not require a margin account.

But yes, funding would be in dollars.

Options on Barclays UK shares would be simpler, I'd agree, but I doubt that the liquidity is there beyond the near month.

I appreciate that I do not need a US broker to buy ADRs, but are there any UK brokers who provide access to options on US shares?

It is a long time since I traded options, but the contract size was usually a thousand shares in the UK, and trades were priced per contract. With a share price a low as that of Barclays, option trading was expensive at retail rates. Near month is probably what the OP wants, but UK option brokers do not appear to be easy to find nowadays.

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Re: How to sell 53036 Barclays Shares?

#129573

Postby johnhemming » April 2nd, 2018, 6:58 pm

Thursday's agreed payment to the US regulators could have been in the range of USD5bn to USD2bn. The market sells uncertainty. USD3bn is a lot of cash. Hence I would expect to see Barclays tick up from here.

However, the OP is not I think in a position where options are a sensible proposal.

Declaration: I am long in Barclays.

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Re: How to sell 53036 Barclays Shares?

#129576

Postby Lootman » April 2nd, 2018, 7:10 pm

GeoffF100 wrote:It is a long time since I traded options, but the contract size was usually a thousand shares in the UK, and trades were priced per contract. With a share price a low as that of Barclays, option trading was expensive at retail rates. Near month is probably what the OP wants, but UK option brokers do not appear to be easy to find nowadays.

Contract size on US options is 100 shares, not 1,000 as in the UK, Nominal share prices are typically higher in the US. An ADR in Barclays is currently trading at $11.62. Since the UK version is about two quid, I'd assume each ADR represents 4 shares of the underlying, so you'd need about 133 put options to be fully hedged, as opposed to the 53 you'd need in the UK.

Interactive Brokers lets you trade US options, subject to margin. There may be others - I'm not sure.

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Re: How to sell 53036 Barclays Shares?

#129588

Postby GeoffF100 » April 2nd, 2018, 8:10 pm

Yes, I had forgotten about IB. They are arguably a UK broker. The price for US options is a reasonable $0.5 per contract, and they will convert FX cheaply too. Nonetheless, this is all rather high powered for the OP. I have said that I would probably just transfer the stock and not worry about it. If he wants to hedge, he needs something simple that he can get up and running quickly. CFDs look like his best bet for that, if they can handle the size.


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