Someone said: You bought 100shares of a $300 stock. If you paid $10 to buy and $10 to sell.?

Question

You need to make 6.6% before you are even...
this is what some one said...and it doesnt make sense to me..
so you are investing 30,000...even 5% of that is 1500$ which is way more that 20$ that you broker charged you, right? Anyone

thank you all
also to the person who said..this was just meant to clarify not to offend..i think you might have made an error or represented in a different way as others have mentioned

Answer 1

Your estimation is dead on! Nice job!

100 Shares of a $300 stock, plus commission = $30010.

To find the exact break even point, I use the following equation:

(P x 100) - $10 = 30010. Where P is the final stock price. With a little algebra, I can find P = 300.20 so the stock needs to rise from $300 to $300.20 per share. What is the % increase?

0.20 / 300 = 0.00067, or 0.067%. Sounds like the person is using "percent of percent" [sometimes called "basis points"] rather than percent.

Answer 2

If you bought 100 of a $3.00 stock and paid a total of $20 commissions, if would take ~6.6% to break even. A decimal point can make a big difference.

Answer 3

Whoever said it needs to get a new broker...

But if they mean $10 PER SHARE to buy and sell, that's $2,000. So, you would need to earn 6.6% on $30,000 to cover the cost.

Answer 4

Maybe they meant $10 per share? that would be $2000 with opening and closing costs, which comes to 6.66% Sounds like a mighty steep broker though....

Answer 5

I think they said $10 per share to buy.

Answer 6

I believe this was someone illustrating about why one shouldnt buy
a *single* stock.

Maybe you misread 100 shares, i think he meant one share.

Answer 7

You are absolutely right. Whoever said that to you is an idiot.

Answer 8

no