Does stock have to be purchased in lots of 100 shares to get the advertised rates?

Question

For sites like Scottrade, do the $7 fees only apply to 100 share lots or can I buy, say, 10 shares for the same commissions?

Answer 1

I think you can buy any amount of shares. The more you buy though, the less the fee eats into potential profits. For example, if you buy 10 shares at $10 a piece, then you have to gain $1.40 a share to break even ($7 to buy, and $7 to sell). Now if you buy 20 shares then you have to only gain $0.70 a share to break even. Many people fall into the fee trap, if you understand it, you can avoid it.

Answer 2

Generally, the commission fee breaks out at the upper limit, meaning when you purchase a large number (in the thousand, not hundred) of share. Each broker has different upper limit.

For Scottrade, they charge a flat rate of $7 per trade (buy/sell.) However, when you place an order and you want to make sure that they'd only charge you $7, you need to check the AllorNone box; you can't check this box for any order with less than 100 shares.

There're instances when you try to buy/sell more than 100 share, Scottrade (or other on-line brokers) could not complete your order in one trade, and they break it in two (or more) orders, they'll charge "the advertised rate TIMES the number of trades." For example, I placed an order to buy 1500 shares of YHOO with Scottrade, and I did not check the "AllorNone" box. Scottrade couldn't buy all 1500 shares at once. So they bought what they could, say 1000 shares. Then later they bought another 500 shares. Since they made two trades to complete my order, they would charge me $14, $7 for each time they purchased my shares.

Answer 3

You should read the fine print to be sure, but generally brokers no longer charge large amounts of money for odd lot (ie not 100 shares) purchases.

Answer 4

You can buy one share for $7.00 at Scottrade. You can buy one share at Schwab for $12.95, you can buy ..... (etc).

This is the correct answer.... just the wrong place to ask it. Go to the source for these type of questions. (unless you think you've been lied to). There should be no investing question that you ever use the answer from Yahoo Answers as your guide!

Answer 5

The commission rates usually depend on how often you trade and/or your account balance. With electronic trading, the number of shares is essentially irrelevant.