Stockmarket selling?

Question

I am a newby at trading and would like some info pls.

if the price of gold is lets say $650 per ounce and i buy it at that price. After 2 weeks have gone, the price increases to $700 per ounce and i decide to sell, will i get $700 dollars or will i get a lot less?

Answer 1

gold, as such, isn't easily traded.

if you ask the same question about the shares of XYZ corp., the answer is that you'll receive $700, LESS commissions, spread, and slippage.

Stock brokers do not work for free and you'll be charged a commission on both your purchase and your sale. The amount of the commission varies from broker to broker, so shopping is required in advance.

Slippage is the difference between the price you think you're going to get when you place the order and the actual price you receive (or pay). Markets operate in the milliseconds between when you decide and your order goes in, so prices can and do change.

There is also a spread between the bid and asked prices for each issue. since you're contemplating a round trip [buy and sell], you'll end up paying the spread as well. the amount of the spread varies from issue to issue with the smallest spreads [in percentage terms] being heavily traded issues and the largest being thinly traded ones.


GL