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How you can still make a loss when you buy low, sell high!

by , 29 April 2014

The most frustrating thing when it comes to trading stocks is when you buy low, sell high and still end up making a pitiful loss!

You see, majority of stock traders out there are still making a very BIG mistake when it comes to trading.

They simply don't consider the profit-sucking costs they have to pay.

So today, I'm going to make sure this doesn't happen to you!

And at the end, I'm going to give you something very special that you can use to cut your stock trading losses to an absolute minimum.

Let's go!

How you can make a loss when the share goes up in your favour!

Let’s say you buy 11 Sasol stocks on the stock market at R442.00.

It will cost you R4,862 (R442 X 11 stocks) to own these 11 Sasol stocks.

But that’s before the trading costs.

On this stock transaction you’ll pay R138.61 in trading costs.

(I’ll explain how to calculate thses costs later on in this article)

That means you’ll pay R5,000.61 for your Sasol stocks (R4,862 + R138.61).

Now let’s say the share price goes up 5.2% to R465.00.

You’d think that if a stock goes up 5.2%, you’d be well on your way to making a profit.

But that’s where things get a little sneaky!

You see, although your 11 stocks will now be worth R5,115 (R465 X 11 Sasol stocks), you still have to pay more fees when you sell.

On this transaction, you’d have to pay additional trading costs of R127, to sell your stocks.

If you take the difference between what you spent on your stocks and fees and what you got out, you’ll see that you actually made a loss from this Sasol trade.

[Full calculation: (R5,115 – R4,862 – R138.61 – R127) = - R12.61

Because you would have made a –R12.61 loss (R4,988 – R5,000) instead of any kind of profit.

In my opinion, this is unacceptable!

So that’s why you need to know exactly how to calculate  these trading costs before you start buying or selling stocks on the stock market.

Here are the four trading costs you have to pay when you buy and sell stocks!

Cost #1: Stock broker fees

The fee your stock broker will charge you is called the brokerage or commission amount.

Your stock broker will charge you this fee for helping you buy or sell the stocks you want.

They generally have a minimum fee of between R85 and R150 per leg in and leg out of your stock transaction.

Note: You need to find out what the broker rate and minimum broker fee is from your stock broker

Cost #2: Trading taxes

Tax #1:  STT or Securities Transfer Tax.

This is also known as MST or Marketable Securities Tax which is a government tax that no one can get away from.

It’s 0.25% of the total price that you buy the stocks. The good news however is that, you’ll only pay this tax when you buy stocks and not
when you sell them.

Tax #2: Normal VAT charges

This is the 14% that you’ll pay on the brokerage amount and other service fees. 

Cost #3: STRATE settlement costs

The STRATE cost is what you pay for the electronic settlement of your shares which is concluded on the JSE.

This is R10.92 (or R12.45 including VAT) for transactions up to the value of R200,000. If you buy a transaction that is greater than
R200,000, it’s 0.005459% (excluding VAT).

If the transaction is larger than R1 million, then it’s R54.59 (excluding VAT).

Cost #4: Insider Protection Levy (IPL)

The IPL is a negligible cost you’ll pay when you buy and sell your stocks which is used to fund insider trading and market
manipulation investigations.


In fact, The IPL is only 0.0002% of the buy or sell price of the shares.

So there you have it, everything you need to know about the different costs you’ll pay when you buy and sell stocks.

So what can you do to profit instead?

____________________________________________________

 
The single greatest trading secret you’ll ever come across

It requires NO effort, ZERO skill, and NO hassle...

Set this up now, and you could have your first pay out in your hands in the next few days.

____________________________________________________


I’ve created a special Trading Calculator that you can use every time you buy and sell a stock, to make sure you’ll profit should the trade
go up in your favour!

All you need to do is put in:
  •          The number of stocks you want to buy and sell
  •          The stock price of where you want to get in and out of your trade
  •          Your broker rate which you can find out from your broker

Once you put these trade specifics in the calculator, you can then see what you need to do to make a profit with your trade.

Play around with this calculator and you can be sure to avoid losses in the future.

So simply click here and claim your Trading Calculator right now!





Always keep in mind,

“Wisdom yields Wealth”




How you can still make a loss when you buy low, sell high!
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