Why does it seem like I spent more than the trade cost for my stocks?

When buying or selling tokenised stocks on Luno, you’ll pay a trade cost for each transaction.

However, there are other factors that contribute to the difference between how much you buy or sell and the final amount you receive. These include bid-ask spreads, and forex spreads:

A bid-ask spread is the difference between the highest price a buyer will pay for an asset (the bid) and the lowest price a seller is willing to accept (the ask). Our tokenised stock provider has some spread built into their pricing, which goes towards compensating the stock provider’s market makers. This is standard practice in traditional stock markets as well.

A forex spread is the difference between the price at which you can sell a currency and the price at which you can buy a currency. There are a few fiat currency and cryptocurrency conversions happening behind the scenes when you make your order, and each has a level of spread included in the currency exchange.

While you pay Luno a trade cost, the additional difference you may notice can be accounted for by spread.

Spread is a standard feature of all trading markets, but with Luno you get some added conveniences: trades are executed instantly, available 24 hours a day, 5 days a week, and there’s no need to open a brokerage account or complete a wire transfer.