After you buy a stock how long before you can sell it? Are they're any penalties for selling too soon?

Question

Is that why day traders loose so much of their money? That and bad stock decisions?

I don't know why I wrote loose. =P

Answer 1

You can sell it right away. In the U.S., stock gains from securities held less than one year are called short-term capital gains and are taxed as ordinary income. Gains from stocks held over one year are long-term capital gains and are taxed at a considerably lower rate. That is one reason that "day traders" are seldom as successful as they think they'll be.

Answer 2

1

Answer 3

There is, of course, a broker's fee to buy and a broker's fee to sell. This can be quite small with some brokers (only a few dollers) but if you trade a lot it adds up.

In the USA, there are also short term and long term capital gains tax. The long term tax rate of 15% only applies if the stock has been held "more than a year" i.e. 366 days. The short term rate is the same as your regular (marginal) tax rate.

Day traders lose money because very short-term trades are basically random, and there are the broker's fees. That makes day trading more like casino gambling than investing---you lose a little on each trade, on average.

Answer 4

A stock is your property and in general you can own it as long as you like--sell it as soon as you buy it, or hold it until you die.

In general its a good idea to hold stocks for a long period of time, because:

1) You pay higher taxes on stocks held for less than 1 year.
2) You will generally be charged a fee to buy or sell stocks. This is why day trading is a lousy idea--over time the charges add up and the market is pretty much random over the short term.

Answer 5

"lose" not "loose" but that is just a pet-peeve.

You can pay higher tax on short investments. BUT as far as penalties , as long as you purchased th stock with clear funds, you can buy and sell in the same day.

HOWEVER, there are rules that you can have more than 3 "round trips" in the same day. This means, you cannot buy a stock, sell it during the same trading day more than 3 times in a week. If you do, you will be considered a pattern day trader and be locked out of trading for the week unless you have 25K in your margin account.

Answer 6

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Answer 7

You can sell it as soon as you own it. The only penalty is that you pay trading fees and of course taxes. Calculate your profit after that, and sell (a profit is a profit!).

Answer 8

1) A second later.
2) Higher taxes.
3) No.

Answer 9

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Answer 10

what can't I sell the stock the same day as I purchase it?