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To: Retire_soon who wrote (17013)	4/23/1999 11:02:00 PM
From: Jim TenIron	Read Replies (2) \| Respond to of 40688

Simple. If you purchase 100 shares of a $1.00 stock it cost you $100.00 plus commissin. If the stock goes up $1.00 ($2.00) then sell half, and you make your money back, minus commis. Let the other half ride for free. Simple. But, you only have 50 shares.

To: Retire_soon who wrote (17013)	4/23/1999 11:40:00 PM
From: Stan	Read Replies (1) \| Respond to of 40688

I'll take a shot at this, even if I am relatively new. . . For example: You own 1,000 shares at $2.00 each, so you're in for $2,000. The price travels, say, to $5.00 and you sell 1/2 of your shares. You now have $2,500 in cash and 500 shares left. Your money is back in your hand (the $2,000 investment, plus $500 profit minus commissions.) Therefore, the 500 remaining shares are "Free". If you are able to buy back more shares at $2.00 again later, you could take that $2,500 and buy 1,250 shares, 750 more than you had before. These are also "Free." The problem with this action is that you are gambling that the price will do what you want it to, when you want it to do it. Some more able daytraders do have relative success at analyzing when these ups and downs are likely to occur. They buy and sell accordingly. Typically, investors like myself are more inclined to wait out the short term dips and rises in favor of an overall climb in price. If I may now take the opportunity, let me sketch the tax consequence of stock sales: Here, "free" is misleading, because you will owe taxes on the $1,500. The short term rate now is 28%, or $420 on that sale. If it was long term -- a year and a day or longer -- then your rate would be 20% or $300. The laws are changing on the holding period and rates, I understand, but you should be aware that the highest rates are for short-term holders. Whenever you sell the next 500 shares that you are calling "free," you need to pay taxes the same way on that lot. These require estimated taxes to be paid directly by you or have your withholding bumped up enough to cover them, if possible. V, I know that this was more than you had asked about. Hope it wasn't too long or confusing. Edit: I see that you've been answered already. Hope you don't mind if I post it anyway. Stan