Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: backman who wrote (8140)	1/18/1999 9:34:00 AM
From: MARK C.	Read Replies (3) \| Respond to of 90042

Backman, Your math is off, 1/16th is .0625% whether or not the principle is 10 or 100. The advantage with sub $10 stocks is the volume of shares one can purchase. CAPITAL= 10000 $100 stock = 100 shares up 1/16th = $6.25 $10 stock = 1000 shares up 1/16th = 62.50 Since most brokers don't charge any different for the purchase of the 100$ or 10$ stocks it can be quite beneficial for traders to buy the least expensive stocks they can find where they feel the risk reward ratio is fair. After all if I pay $12 in commission then I would make $50 on the $10 stock but I would be at a loss on the $100 stock. Thus if I have a choice between an expensive stock or a lesser valued one, I would choose the least expensive stock as long as I felt the risk reward ratio warranted it. I call that more bang for the buck.