Frictional Expenses: The Hidden Investment Tax
Few investors are aware of the tremendous damage so-called frictional expenses impose on investment performance. By merely reducing these expenses, you may be able to significantly increase your long-term rate of return by lowering your overall cost basis. Commissions and Fees The most frequent frictional expense is brokerage commissions and fees. Thankfully, with the advent [...]
End of post for Types of Market Orders !
Congratulations! You’ve reached the end of the stock trading tutorial postings. You now have the basic building blocks to help you make better decisions for your portfolio. This handy summary will serve as a cheat sheet in the future: · Market orders guarantee execution but not price. · Limit orders guarantee price but not execution. [...]
Trailing Stop Orders
One way to protect gains and limit losses automatically is by placing a trailing stop order. With a trailing stop order, you set a stop price as either a spread in points or a percentage of current market value. Imagine you purchased 500 shares of Hershey Chocolate at $50 per share; the current price is [...]
Day and GTC Orders and Extended Hours Trading
Comments OffWhen you place an order, you must give it an expiration date. Day orders are good until the end of the trading day, at which point they are cancelled; all market orders are placed as day orders. Good-till-Cancelled (GTC) orders, however, remain open until one of three things occurs: 1. They are completely filled 2. [...]
Selling Short and Buy to Cover Orders
Comments OffAs you learnt in The Basics , selling short is an extremely speculative practice that can, theoretically, lead to unlimited losses. Here’s how it works: You think that Company ABC is grossly overvalued. Management is terrible, financial condition is deteriorating, the sales outlook is pitiful, and, you believe, the stock price does not fully reflect [...]
