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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked

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To: MARK C. who wrote (8142)	1/18/1999 10:06:00 AM
From: backman	of 90042

MARK: Let me try again..i'm talking about the spread on the bid/ask relative to the stock price, and what my 10K buys immediately after the purchase.commission is $15, spread is 1/16 so here goes: 10K buys 99.85 shares of a $100 stock. if i sell it immediately, $9963.76 is what i have left on a $10 stock, i own is 998.5 shares. if i sell it immediately, $9907.59 is what i have left. Difference is $56.16, benefit to higher priced stock Regarding risk/reward, i start with the assumption that the risk/reward on both stocks is the same. I agree, if you can quantify risk/reward, to where it's enough in your favor to offset the spread, go for the cheaper stock. BTW, I would think that the spread on lower price stocks is typically(not always) greater than the spread on high price stocks, which would increase the relative value of the higher priced stock david s

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