To the thread:
(Not for real-time traders, more for folks with e-accounts (DATEK, ETRADE, etc..) and not about internet speculation)
My ebrokers don't charge me differently for buying 12 shares or 700 shares…odd-lots don't seem to be a problem
So somebody explain to me the desire to own stocks under $10.00?
Symbol Bid Ask Spread
CLST 8 3/8 8 7/16 1/16
EDUSF 7 ¾ 7 13/16 1/16
HOLT 5 3/8 5 ½ 1/8
DELL 78 15/16 79 1/16
MSFT 149 ¾ 149 13/16 1/16
Assume you have $10,000 to invest. The commission for the trade is the same. On the $10 stock, 1/16 is .625%, an 1/8 is 1.25%, so I have to earn that back on the selling point to get to break even…kind of like the depreciation on a car as you drive it off the lot
On the $100 stock, 1/16 is .0625%, an 1/8 is .125%…less depreciation on my original investment…
more of my capital going to my investment+ less into my trading expenses =more BANG for the buck
While it might be easier for a $10 stock to go up 20% (or go down 20%), the less I give up in trading expenses, the more money left over …looks to me like better returns on my capital….and, IMO, if all you have is $10,000, you've got no business putting it into a more volatile, lower return investment.
david s
Disclaimer: I know it's not as much fun as looking at lisa's personal profile, and i'm sure i'll find the naked picture (or go blind trying), but... |
