What about when they say 50 commission free trades? If I only buy/trade this one stock does that mean it is free?
2007-02-08 02:22:04 · 4 answers · asked by Anonymous in Business & Finance ➔ Investing
Yes that buy is a trade. When you go to sell them all that is another trade and will be another $9.99. And no the free trades are a come-on which will not help on this trade.
Most brokerage houses make their money on those commissions so you should be wary of any that claim 50 free trades. They usually say (in tiny fine print however) that you must deposit some large amount of money with them to trade or that you must have some high number of trades per year. Bank of America offers all trades for free BUT you must have a certain total of money in accounts with them (checking, savings, car loan, mortgage, home equity loan).
Some of the ones that claim cheap rates are not making their money on the commissions from the buyer. They are getting kickbacks from dealers who sell stock at higher prices than other dealers. The price difference comes back to them as a fee and you pay more for your stock than if you had gone to a broker who charged a commission but tried to get you the best price.
2007-02-08 02:34:14 · answer #1 · answered by Rich Z 7 · 0⤊ 0⤋
A "trade" is considered any buying or selling of a security. Buying 25 shares would be considered a trade, but you may want to check the fine print to see if that particular trade qualifies for the $9.99 rate. Some brokerages consider any trade of less than 100 shares to be "odd lot", and charge more.
The "50 commission free trades" may also have some strings attached. Frequently, the discount brokers want you to maintain a pretty high balance at the brokerage in order to get that rate.
2007-02-08 02:27:30 · answer #2 · answered by SuzeY 5 · 0⤊ 0⤋
Each trade is each transaction. Buying 1 stock is one transaction; selling 100 stocks is another transaction. BOth will cost you $9.99. Yes, buying 25 shares is 1 trade. However, buying the 25 shares, then selling these 25 shares constitutes 2 trades.
2007-02-08 02:33:17 · answer #3 · answered by Muga Wa Kabbz 5 · 0⤊ 0⤋
Muga is wrong. Selling 100 stocks is 100 transactions/trades. Selling 100 shares of 1 stock is 1 transactions. Once again, read the find pirnt of the contract. The 50 free maybe market orders so they get their fees with higher buying prices.
2007-02-08 05:04:22 · answer #4 · answered by gosh137 6 · 0⤊ 1⤋