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| goldguy2 |
 Posted: Mon Sep 08, 2008 5:39 am Post subject: Commissions eating up profits? |
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Investing Sr. Associate
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In watching real-time quotes blinking red and green on my screen, every day I see scores of 100-share trades of stocks valued at 2, 2.50, 3, etc. per share. My current per-trade commission on the account I use most is $10.95 for up to 1000 shares. If I traded 100 shares of a 2.50 stock, the cost would be $250 plus $10.95 one-way, meaning a Break-Even of $2.6099 per share.
If I bought 1000 shares at 2.50, the commission one-way would still be only $10.95 and the total cost would be $2500 plus $10.95, or $2510.99, meaning my BE would be $2.51095. This is way lower than if I bought 100 shares.
What I'm wondering is how anyone can afford to buy 100 shares of a $2.50 stock. Are these brokers who charge themselves no commission? Are they newbie investors who don't realize the economy of buying 1000 shares instead of only 100? Are they insiders who know the stock will easily go up enough to absorb their proportionately high commission? This has puzzled me for some time and I finally decided to ask about it. |
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| eamoses |
| Posted: Mon Sep 08, 2008 7:43 am Post subject: |
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Investing Manager
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well for long positions it doesn't make a big difference... if your day trading then look for free trades... or really low commissions. personally i don't buy stocks under 4 dollars, and i use scottrade so my commission is only 7 dollars, if you want to switch let me know before this month is up and i could get you 7 free trades.
zecco does ten free trades a month if you have at least 2500 in your account, i know several guys on here use that one. |
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| goldguy2 |
| Posted: Mon Sep 08, 2008 1:52 pm Post subject: Commissions eating up you profit? |
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Investing Sr. Associate
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My favorite price range is $2.50 to $4 because I can buy 1,000 shares or more. Just a preference.
I spoke with an e*Trade financial officer the other day and he said if I opened a new Roth IRA the current promotion would give me 50 free trades. Nice deal. Too bad I just put new windows in my house and now am remodeling the bathroom (that's a doozy drain of dollars), but thought I'd mention it. |
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