02-11-2006, 02:11 AM
Wolf Larsen Wrote:
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> Its impossible to pick the low and the high. If
> you can, please contact me immediately. Common
> advice is to buy in stages. If it goes lower buy
> more and so on. If it heads up immediately, then
> that's the worst that can happen. For example,
> you want to buy 100 shares. Buy it back in 25
> share increments. Buy some Monday. If it goes
> down on Tuesday buy some more. It stays unchanged
> Wednesday, do nothing. etc. until you have bought
> back your 100 shares.
This advice is particularly common from online brokers, who earn four times the commision if you make four purchases of 25 shares instead of one purchase of 100. Assuming $10 a trade, that means you're paying an extra 40 cents for each share you buy, rather than an extra dime each.
(That's not to say that staged buying is a bad strategy in general, but when you're doing frequent trading on small quantities of shares, you need to be careful not to let transaction expenses eat up your profits.)
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> Its impossible to pick the low and the high. If
> you can, please contact me immediately. Common
> advice is to buy in stages. If it goes lower buy
> more and so on. If it heads up immediately, then
> that's the worst that can happen. For example,
> you want to buy 100 shares. Buy it back in 25
> share increments. Buy some Monday. If it goes
> down on Tuesday buy some more. It stays unchanged
> Wednesday, do nothing. etc. until you have bought
> back your 100 shares.
This advice is particularly common from online brokers, who earn four times the commision if you make four purchases of 25 shares instead of one purchase of 100. Assuming $10 a trade, that means you're paying an extra 40 cents for each share you buy, rather than an extra dime each.
(That's not to say that staged buying is a bad strategy in general, but when you're doing frequent trading on small quantities of shares, you need to be careful not to let transaction expenses eat up your profits.)