Newb - Shares

sarbaloosa

-Guys,

Just a basic question. Say I have 1000 and I buy 100 shares in a company at 10 pounds per share. Say the share jumps up 15p and I sell. That means I make £15.00. Now I repeat this 10 times and make £150.00

Now, before I spend my grand - what is my outlay?


- How much does it cost me to sign up an account on say iii?
- How much does it cost me to fund my trading account?
- How much does it cost me to buy the 100 shares
- How much does it cost me to sell them when I make £15?
- Do I pay tax again when I repurchase?
- Do I pay tax again when I resell?

Just basics but wondered if you could help?

THANKS

bigadaj

There are all sorts of business models out there and the best will vary dependent on your specific circumstances, so if you detail approximate sum involved, how of ten you might trade, whether you want to hold, funds, shares or both and anything else pertinent then you might get a more detailed answer.

In your example you'd lose money on the deal due to trading costs and there's also stamp duty of course. Anything less than a. Grand is normally consider uneconomic.

Thrugelmir

sarbaloosa wrote: »

Say the share jumps up 15p and I sell. That means I make £15.00. Now I repeat this 10 times and make £150.00

Shares are quoted with 2 prices. A buying price and a selling price. So to make a profit by churning shares isn't as easy as it may seem. Factoring in the costs as well.

Linton

sarbaloosa wrote: »

-Guys,

Just a basic question. Say I have 1000 and I buy 100 shares in a company at 10 pounds per share. Say the share jumps up 15p and I sell. That means I make £15.00. Now I repeat this 10 times and make £150.00

Now, before I spend my grand - what is my outlay?


- How much does it cost me to sign up an account on say iii?
- How much does it cost me to fund my trading account?
- How much does it cost me to buy the 100 shares
- How much does it cost me to sell them when I make £15?
- Do I pay tax again when I repurchase?
- Do I pay tax again when I resell?

Just basics but wondered if you could help?

THANKS

An account with iii costs £20/qtr.

Buying or selling costs £10 - the first 2 transactions each quarter are free. There is no charge for transferring money into or out of your account

You pay stamp duty of 0.5% when you buy shares. There is no tax when you sell, unless you count capital gains tax but that only comes in when you make profits of £10900 in a year.

I wouldnt recommend that you adopt your simple strategy.

sarbaloosa

Linton wrote: »

An account with iii costs £20/qtr.

Buying or selling costs £10 - the first 2 transactions each quarter are free. There is no charge for transferring money into or out of your account

You pay stamp duty of 0.5% when you buy shares. There is no tax when you sell, unless you count capital gains tax but that only comes in when you make profits of £10900 in a year.

I wouldnt recommend that you adopt your simple strategy.

Thanks for this.

I guess my strategy would work if I had a few grand to play with and bought and sold shares that returned more than £15 profit. I'd imagine if I was making £50-100 per transaction then it would be worthwhile after taking out the £10 x 2 (buy and sell) and 0.5%.

For that, I'd have to play with the big players in the market and to do that, I need big money.

All I wanted to do was take a punt at day trading with a grand and make small short gains. It'd be nice if the companies said £10 for any shares bought within a 24 hour period and £10 to sell in a 24 hour period. Meaning a maximum fee of £20 to have a play.

sabretoothtigger

50p a trade is cheapest I know but also costs 100 a year to be a member

If you want to learn, go to stockchallenge and visit there every day for 5 mins (or 1 minute even so long as you are consistent) to see how stocks cost and move. Enter in for october your stock ideas then observe results.
You should learn at least something and this will cost you nothing to do. Gain experience enough times in trading and you will become a virtuoso but writing forum threads is not real and its harder to learn before you actually spend/lose money.

grey_gym_sock

even with larger sums, you're more likely to lose money from day trading. most ppl do.

suppose you can get your total costs of trading under 1% - i.e. a share price has to rise by 1% before you're in profit.

on most days, there are plenty of shares rising at least that much. there are also many shares falling at least that much. the fallers nearly cancel out the risers. the average share on the average day might rise by about 0.03% . to make money from day trading, you either have to get your costs lower than that, or have some ability to pick better shares than average.

that may sound easy - just better than average - but it isn't. the market price reflects the collective knowledge of all market participants.

that's not to say that it's impossible to beat the market (without luck) under some circumstances. it does tend to go to extremes of over- or under-valuation from time to time; you can make money by going against the crowd. also, some ppl have knowledge about a specific business sector, which may (or may not!) help them to pick good shares to buy in that sector.

but those (possible) ways of beating the market are all about longer-term investing, not day trading. in the latter, an individual is in a less favourable position than professional traders or automated programs.

sarbaloosa

So where can I deal with 50p a trade? Does that mean pay 50p to buy and 50p to sell but pay £100 per year? Im regularly reading tech news and I heard the news about the Microsoft-Nokia takeover back in the day. Similarily I hear or read about other such takeovers and 9 times out of 10 they come to. I just want to jump on these bandwagon before something kicks off.

grey_gym_sock

keeping up with tech news doesn't necessarily translate into the ability to make money from tech shares.