Online brokering (sharemarket)

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rayonline

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#154272 22-Oct-2014 21:19

Hi, after getting into Kiwisaver and as I work in a finance team. I am juts doing the ground work for this now.

Question - with normal shares how often do you buy and sell or do you just wait for the moment and buy with the money you have and then hold them for quite some time? I mean due to the ~$30 brokerage fees per transaction. Ie for Xero shares just because they are a bit more dynamic today's $1 (6-7%) gain you would need 30 shares to breakeven that $30 brokerage fee which is about $550 worth of shares. For for mellow changes it would require even more larger investment to breakeven that fee.

I can understand those that want more frequent buy/sell one example might be CMC Market but that is a whole different kettel of fish.

Cheers.

floydbloke

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#1160395 23-Oct-2014 07:26

Don't forget the fees are per transaction, so you're really looking for a $60 gain before you can realise a profit.

Sometimes I use big words I don't always fully understand in an effort to make myself sound more photosynthesis.

Boeingflyer

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#1160400 23-Oct-2014 07:51

i look at it this way in how much you need to make to cover your brokerage of $60:

$1000 - 6%
$2000 - 3%
$3000 - 2%
$4000 - 1.5%
$5000 - 1.2%
$10,000 - 0.6%

and so on and so on.

I've just started investing on the small caps in Australia. If you have the spare cash and want an emotional roller coaster, try that. Look at the share FAR.AX, was 3 cents a few months ago, shot up to 16 cents the other day and has dropped back to 10.5 cents. Massive gains but massie losses as well.

Also don't forget the opportunity cost of that money as well, if you buy shares and hold on to them for a year and make nothing, then you lost the amount of interest you could of saved by putting it on your mortgage or in a term deposit.

one last thing, if your going to buy shares in Aussie, you have the exchange rate to deal with as well.

Just a few things to think of. As they say in the share forums, DYOR (Do Your OWN Research) and GLTA (Good Luck To All), Not to be confused with the Gay and Lesbian Tennis Club

rayonline

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#1160406 23-Oct-2014 08:11

Yeah I know about that - $1,000 require a mega gain to offset it. Per transaction yep. A larger investment size is what I would do like $4-5k per.

Just with the $60 transaction. What do you mean by that? It's $30 up to roughly $15k per transaction, or are you meaning to sell it for another $30 fee?

I just thought, to offset the fees, you won't be buying and selling in the very short term. If you did you may get into CMC Markets. Also if you did it that way you may be into capital gains tax cos you are a trader. So do you guys leave some funds in a call account which gives somewhat interest and then pounce on the market? So roughly how often do you guys buy/sell? Monthly, fornightly?

Boeingflyer

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#1160423 23-Oct-2014 08:57

Yep $30 to buy and $30 to sell.

Boeingflyer

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#1160425 23-Oct-2014 08:58

I've only just started so holding everything at the moment. I'm a very small fish in a very big pond.

floydbloke

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#1160539 23-Oct-2014 10:58

I'm by no means an expert but to me it seems that the NZ sharemarket is not well suited to high volume, rapid trading to make a quick buck unless you're playing with thousands at a time (refer Fabian's table above).

For that I fiddle around with US stock options. ( I use optionsxpress.com, $15 per trade) which let's me 'invest' a few hundred bucks at a time. It's more like a TAB account than an investment for me though. One day I might invest a couple of hundy to watch it slowly ebb away to zero,then on a good day you might double your money overnight (like this week, bought 300 UIS options for 80c last Tuesday, quarterly results outperformed market expectations, the stock itself jumped by about 20% meaning I could sell the options for $2 each overnight [could potentially have got more if I had sat and watched it but would rather sleep so set a limit order])

Sometimes I use big words I don't always fully understand in an effort to make myself sound more photosynthesis.

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rayonline

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#1160542 23-Oct-2014 11:13

Yes with the big NZ online bank brokering services. The overseas markets apart from AU, have fees like 50-70 USD or GBP per transaction (minimum).

floydbloke

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#1160552 23-Oct-2014 11:20

rayonline: Yes with the big NZ online bank brokering services. The overseas markets apart from AU, have fees like 50-70 USD or GBP per transaction (minimum).

I found getting an account set up with an online broker pretty painless, other than having to deposit the original funds with an International Money Order which was a bit of a faff and lots of fees at both ends.

Sometimes I use big words I don't always fully understand in an effort to make myself sound more photosynthesis.

rayonline

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#1160871 23-Oct-2014 18:34

If you wanna do shorter term buy and sell look at CMC Markets. The fees are a lot lower but I haven't used it just yet. They trade in CFDs. Access to international markets including Asia I think and can be leaverage but both gains and loses can be increased. Ie you can gain and lose more than you put in initially.