Hey folks , newbie here from Toronto. I've been running my own business for nearly 10 years with a decent income and I would like to try trading stocks for added income and possibly a change of jobs in the future.
I know the general idea and have a few thousand set aside that I don't need and can play with and even lose with no major consequence.
So I guess I have a question or two on how this all works .. Let's say I like a company and buy 500 shares of their stock at $10 and pay $5,000 + a few dollars commission.. correct so far ?
Let's assume in a few months the company does well and the share is $12.. Is selling my stock as simple as buying it and can I cash out without further consequences ? So I would sell my 500 shares at $12 and get $6000 in my account , I assume I have to pay the seller a % fee + another fee to actually see my money in my bank account ,, am I correct in assuming I made about $800 after fees and such ? + whatever taces I will have to pay on that $800 income
Do I have it correct or am I missing something ? I'm sure there are a lot of other little factors but is this a general way of how stocks are traded on a small time basis.
buy stock , pay a fee to buy around $5-10
sell it and pay a % commission + $100 ..
I'm just using the above as an example to see if I have the theory correct.
Thanks for any help..
Yes, that's basically how that works. Here are a few corrections:
-- when you buy/sell a stock, you don't know who is on the other side of the transaction. The fees that you pay include the commission to the broker and various exchange fees. Typically, your broker will bundle all the fees into a single one (such as $10 to buy/sell up to 1000 shares)
-- after you sell, the money typically stays in your brokerage account (so that you can continue to buy and sell), until you withdraw it.