Share Dealing Discussion Area

Biggles

I hope you do your share selection research more carefully.

Selftrade's dealing commission is £12.50, not £12.95. Their annual charge is £35+VAT, not £37. Though, looking on the positive side, they are both cheaper than you thought!

And their three free trades are permitted in August only, and it's uncertain at the moment whether that's just in the initial year of the introduction of the new annual charge or whether it will apply every August.

sabretoothtigger

Trading 5 times a week should mean a broker will give you commission much less then £10 each time

etrade or barclays will reduce fees for high activity I think, also the company TT mentioned


Main thing wrong with your thinking is you are too personally biased.
If I drove a car accelerator based on the tempo of the music I was listening to, obviously I'd crash if I did

If you trade shares based on whether you personally have made money or not you will also crash.
The market doesnt give a dam whether you made money or not and basing your decision to stop or go with this company based on your own feelings is how to lose money

The only way the above could really work is if generally shares rose, ie. a long term bull market and your costs were low and you hold the shares for a long time.

Its blind luck but british companies arent so bad most of the time, they have been pretty crap this last 10 years though.

However you've just told us you will have high costs, you wont hold the shares, receive dividends and to top that we really arent in a proper bull market, its more like a bull run.
In summary the advice you've received here was good. Start slow, bank your profits then gamble them if you really are that lucky or good you will be upto 7k soon enough because trading is very profitable in theory

In practice trading means every time you win money, someone else just lost it so you better be the hulk hogan of share trading or something

Base line or natural growth for ftse100 is on average a puny 3% per year excluding dividends

Buy and hold can still make a fortune in its extremes, this is how Buffet did it he says.
£1000 in Cisco systems 1990 would have become £1,000,000 just ten years later.

That was totally justifyed by the growth in importance of a company making internet switches from nothing to everything. They just entered the Dow index this year also

peterg1965

Biggles wrote: »

I hope you do your share selection research more carefully.

Selftrade's dealing commission is £12.50, not £12.95. Their annual charge is £35+VAT, not £37. Though, looking on the positive side, they are both cheaper than you thought!

And their three free trades are permitted in August only, and it's uncertain at the moment whether that's just in the initial year of the introduction of the new annual charge or whether it will apply every August.

Those figures were from memory as I was typing, not that bad!

Biggles

Of course, if, as SabreTooth suggests, you are trading around 5 times a week, say 60 times a quarter, you'll pay £3,000 a year commission with Selftrade (frequent trader doesn't cut in till you've traded a stingey 100 times).

You'd only pay £2,388 with Barclays or TDWaterhouse, or £1,680 with eTrade, just to pick three random examples. There will be many more, nearly all will be cheaper than Selftrade.

So the headline commission and presence or lack of an admin charge is fairly irrelevant at that level of trading.

At a lower level, maybe 2 or 3 times a week, say 30 times a quarter, you'd still pay £1,500 with Selftrade, £1,554 with Barclays, £1,194 with TD Waterhouse and £1,080 with eTrade.

sabretoothtigger

http://www.share.com/a/share-account-costs.html

Check out those guys, you could buy 4 times a day at 2.50 commission each time but the downside is they charge 7.50 to sell anything but the round trip would still undercut basic selftrade


I was thinking about this myself, lets say a reasonable max to spend on commission is 1.2% each way. So then its only a small rise of 2.5% to break even, very reasonable and any stock can move that much for no reason really


For £12 commission that would be £1000 min worth 'risked' on shares
For £10 its £836
For £7.50 its £628

For £5 its only £420 (share center example above averaged out)
For £3.25 its £272 (Halifax sharebuilder)


The last two arent realtime dealing but it seems reducing commission can lower the stakes - amount of risk and capital required to get a reasonable percentage return


Also, investments not subject to the cost of Government Stamp duty of 0.5% are ETF, ADR, IT and unit trusts

peterg1965

Biggles wrote: »

Of course, if, as SabreTooth suggests, you are trading around 5 times a week, say 60 times a quarter, you'll pay £3,000 a year commission with Selftrade (frequent trader doesn't cut in till you've traded a stingey 100 times).

You'd only pay £2,388 with Barclays or TDWaterhouse, or £1,680 with eTrade, just to pick three random examples. There will be many more, nearly all will be cheaper than Selftrade.

So the headline commission and presence or lack of an admin charge is fairly irrelevant at that level of trading.

At a lower level, maybe 2 or 3 times a week, say 30 times a quarter, you'd still pay £1,500 with Selftrade, £1,554 with Barclays, £1,194 with TD Waterhouse and £1,080 with eTrade.

I doubt I would have the time to be a frequent day trader. It would more likely be one trade maybe two week (buy and sell as two seperate trades). I will look at eTrade, are they as easy to use as Selftrade?

peterg1965

Could someone kindly explain the following share order terms, preferably in plain English!

'At Best', 'At limit' and 'Stop Buy'.

Many thanks.

cashbackproblems

If like me your just doing the odd trade i.e. once a fortnight why not just pay at £10 transaction with iii or for a long term buy where the current sp isnt too volatile on a daily basis you can set the trade in advance for £1.50 (4 dates a month to choose from).

sabretoothtigger

http://www.investorwords.com/306/at_best.html

Selftrade itself has helpfiles for this I think



http://www.investorwords.com/657/buy_stop_order.html


at limit or Limit order is to limit profits I think, lock in gains and sell before you think a drop may occur. Opposite of stop loss

tradetime

peterg1965 wrote: »

Could someone kindly explain the following share order terms, preferably in plain English!

'At Best', 'At limit' and 'Stop Buy'.

Many thanks.

"At Best"......have never heard of it, if I had to guess I'd say it is probably a market order, ie an order to buy or sell a security immediately, at the best price currently available.

"At limit"...... is an order to buy or sell at or better than a specific price, being the limit. Barclays (BARC-LON) is currently trading at 310, you would use perhaps as follows; Buy BARC-LON @ 300 limit. This instruction tells your broker to buy Barclays at 300p or better/less. A limit order to buy is placed below the current price whilst a limit order to sell is placed above. A limit order would be used to control the price at which you enter a new position or exit a profitable position

"Stop buy"........is an order that acts as a "trigger" like the "limit" it specifies a price that you wish to enter or exit a security, however it does not "limit" the amount you are willing to pay if buying, or accept if selling. Once the "trigger" price is hit you are effectively in a "Market order" Thus to use the previous example it might be Buy BARC-LON @ 300 stop. This instruction tells your broker to buy Barclays as soon as it trades at 300 for whatever the price, in a fast moving market, because there is no "Limit" your trade may execute some distance away from the trigger price. "Stop" orders are most commonly used to exit positions that have gone wrong, though very short term traders ie daytraders may use them to enter or exit positions. They are also known as a "Buy stop" "Sell stop" or "MIT" (market if touched)