lets say the broker is $5 a trade and i wanted to buy 100 for $1.50. whats the amount to get started?
Answers
170 points
StockGangster answered 8 months ago …
Most brokers have an "account minimum", meaning, even though they may only charge you (very little) per trade they still want you to keep a certain amount of money in your brokerage account before they'll let you buy anything. This helps them overcome the risk of having investors on their system that are "too small" - meaning, they won't earn enough commissions off of you.
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2222 points
readytoretire answered 8 months ago …
The trade would cost you $155, 150 for the stock and 5 for the trade. As to StockGangster's comment about minimums, Scottrade has a $500 account minimum to open an account.
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2082 points
alanj answered 8 months ago …
This is basic math. When you multiply any amount by 100 you simply move the decimal point 2 places to the right and then add the $5. I would be a little concerned. Investing requires some basic math skills. Might I suggest investing in a simple calculator. That's all you need.
Unless you where wanting to know if you needed to maintain a margin in your account. In that case- not with this type of trade. Note: Use a limit order to buy 100 shares at $1.50 and it won't go over, or shouldn't. You do sometimes get slippage, but rarely with a limit order. With a limit order, that means the order will get filled for $1.50 or less.
356 points
Dusty answered 8 months ago …
Look at the costs of investment compared to the benefits of the trade. A reasonable minimum amount of investment cash per trade is about $1000.00. If you used this guideline and bought a nominal $1K worth of stock you might buy 650 shares, $975.00 plus the commission, $980.00. Consider a scenario where the stock gains a dime in a few months and then falls a nickel. So you want to sell and make a nickel a share (because your penny stock shows every sign of heading to a price of about 50 cents a share or less). The return on this volume is $32.50, less the $5 to buy and $5 to sell, $22.50 gain. The same rise and fall of price on 100 shares with the same selling point would have resulted in a $5 loss.
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