How much of a buy-in do you guys use per stock?

[felix]

Hi,

I was interested in seeing what amount others generally buy into a stock with.

What do you consider an absolute minumum to put down on a trade?

And what percent of your total trading bankroll do you tend to put down per trade?


(Note: I have a very small bankroll myself of $6000 and I am aware most would say this is nowhere near enough to start with. However I don't want advice on why I should stay away from the market, I am just interested to see a range of what levels others trade at)

 

[scranch]

how long is a piece of string?
I use an amount of roughly $5000,sometimes a bit more sometimes a bit less,seems a nice round figure,with brokerage on top.Only hold about 5 lots of steady long term ones+the ones I got from iag and amp.These are the basis of my long term plan,the one I broke the rule with was mbl,and doubled up on on the assumption,I suppose,the greater the price the less the risk.
Know a guy who did an investment course thruogh a community college and was told to invest in equal dollar amounts,some how got it twisted and is trying to invest in equal share numbers.Try buying 1000 erg,then buying 1000 rio shares,and coming up with an even balance!
Lot depends on what you want to do with your 6000,if you want to look after it and invest for growth and dividend Iwould probably find one company,or maybe 2,and leave it at that as a basis to build on.I was at a seminar the other night on cfds,the guy there said you can open an account with $5000.I was thinking,that's not enough,when my son whispered "That's what I like"
It all boils down to risk profile,and earning capacity I suppose.
E,G Someone young and earning $100 000 a year would be a lot different to someone retired and on the pension.
Brian

 

[3 veiws of a secret]

I must admit I concur with some of "Scranch" thoughts on the issue .I have friends that use shares like chips besides a roulette wheel, and they buy like sheep. Do they make money ? well its not my business to ask. I personally compound ,ie I buy a share sell it ,and then reinvest into to it -comes tax time, I shuffle a % too Pete Costello and so forth.
I don't margin lend or do CFD,less pressure when its yours cash.Is it the correct method ,well I sleep well. At the end of the day I know I can only inject so much money into share market. I don't have all my eggs in shares ,also there are other pitches i use ,but that gets personal.
You must remember,that what you bet with ,is as much as you can loose or gain,but many never talk about their looses.So don't get blazed by how much others invest ,it's the case of "I'll hold your hand but I won't wipe your backside "scenario. Just keep reading,knowledge can be a dangerous thing -GOOD LUCK Felix.

 

[scranch]

Forgot to say my first buy was 2500 shares of bpc @.39 per share.Sold @ .92 to put into income paying fun shares.Saw them go to$2.20+,then dive to $1.55.Sold out at $1.71 for a capital loss,then bought in at $1.69,saw them dive to under $1.60,then bought more at $1.60 to give average price of$1.66,so $5000 rule is a rough rule of thumb.
Went to a cfd seminar with my son,thinking about putting some money into a trading account,to try and multiply a bit.The guy running this one said 68% of their clients lost,or broke even trading cfds.
Actually he said 32% of their clients made money,but I could hear a warning bell somewhere deep inside.

 

[Julia]

Average buy-in price? Depends on the company. Woolworths, e.g. around $20,000, smaller company anywhere from $5000 to $10,000. I'm fairly conservative so will put more dollars into "safer" investment and less onto a punt. Then again, I sometimes buy for yield so purchase price (having established reasonable security of the company) will be determined by the income I'm looking for.

Julia

 

[michael_selway]

Average buy-in price? Depends on the company. Woolworths, e.g. around $20,000, smaller company anywhere from $5000 to $10,000. I'm fairly conservative so will put more dollars into "safer" investment and less onto a punt. Then again, I sometimes buy for yield so purchase price (having established reasonable security of the company) will be determined by the income I'm looking for.

Julia

Also depends on how much initial capital u have

thx

MS

 

[Knobby22]

My minimim is $3000.

 

[swingstar]

Depends on a few factors... distance between entry and initial stop, current price, how much I'm able to risk, etc. No guess work.

 

[pharaoh]

Hi there

i started in january.
Bought $1000 worth of a co at about 23c
went to 50c in 6 weeks

bought some more at about 1.4c, went to 5c

didn't always sell when a retrace happened

Importantly - thought best to stay for 12 months so i didnt get capital gains tax, ha, how funny is that
if i sold on major retraces, after tax could have made more than waiting 12 months, then selling then

Anyway, now I buy about $2000 worth.
Plan is to make lots on CDU (have about $6000 in it) and then can start buying $5000 lots

Of course if it goes wrong, I certainly won't be

But thats my risk profile atm. Sell for profit, use to buy more shares, sell for profit, use to....etc

 

[canny]

Minimum $5000 per stock - but prefer to have at least $10,000 so that a 5% rise gives me a weeks pocket money, and the longer term trades give me the bigger cake!
Some of my bigger holdings I'd have $50 to $100K in one stock, particularly if I know it's about to take off. That way, you can keep a core holding and sell half as a trade.

I've built this up over the last few years. When I started, I though 2 or 3 grand was a big deal! Now that's a trading profit for a reasonable week!
All relative to your life style and budget.

 

[felix]

I started with my first stock putting $1000 in and the brokerage killed any profit (this is short-term trend trading which is what I prefer). Then I tried with $2000 and it was much the same. I figure from here I have to either put $3000 into two stocks, or the full amount on one stock.

I probably do sell too early and often on retracement but this is a learning curve I have to face. All the books in the world haven't helped me much I find - it's my own money being on the line that has been the best way of learning, which is why I am persisting despite my small bankroll. I may as well take my lessons while they are coming relatively cheaply.

I looked into CFDs but due to my low annual income and lack of assets I am finding it hard to be approved by any CFD broker, so I'm restricted to share trading at the moment.

 

[coyotte]

I looked into CFDs but due to my low annual income and lack of assets I am finding it hard to be approved by any CFD broker, so I'm restricted to share trading at the moment.

Don't think you'll find they go to all that much trouble checking out your financials ---- just submit some believable figures

IMHO IGMarkets is the only way to go if you are on a limited budget --- just remember to only trade what you can afford to loss

Cheers

 

[dr00]

$4000 is my min, anything less and you only really make chump change unless you get lucky.

 

[felix]

Don't think you'll find they go to all that much trouble checking out your financials ---- just submit some believable figures

IMHO IGMarkets is the only way to go if you are on a limited budget --- just remember to only trade what you can afford to loss

Cheers

I tried IG first since at least they didn't ask for your liabilities but obviously I didn't inflate my income or current cash by enough since they automatically rejected me. They did phone me, afterwards, but I wasn't home and haven't called them back at this point.

I'm not so sure I want to go with a market maker but I suppose I can't afford to be too choosy, either, since IG seem to be only ones who don't charge you for data and/or use of their trading platform.

 

[felix]

$4000 is my min, anything less and you only really make chump change unless you get lucky.

Yeah, even at $3000 the stock needs to go up 2% just for me to break even on brokerage.

Maybe I need to go make friends with Crazy Shark.

 

[NettAssets]

Might be worth looking at options instead of CFD,s Felix.

You should get a debit trade only account with $6000 with any income and can get it upgraded to credit trades in a couple of months.

Do your homework first and read a bit on option pricing and volatility - have a look through the derivatives thread here and WayneL's blog.

Don't be concerned initially with rolling or changing positions because with single leg, single contract trades we'll just bail out if things go pearshape.
There is a lot of leverage to be gained using options and a position can bite you on the bum real quick however as long as you are in a position to watch the trade and only buy low volatility for a start the posibitlties are great.

I'll add a trade that I have on at the moment with Westpac. you can see the share percent move and the profit % move. I have worked this for one contract and Etrades brokerage which is about the highest.
Regards
John

Having trouble with my file size I'll get it in a moment

 

[NettAssets]

WBC Trade for Long call option

 

[NettAssets]

RE WBC options

I was going to sell an Aug $23.50 call against this and leg into a bull call spread but I can only get 7c for it so it wont pay the brokerage if we have to buy it back
so no go for august. I havent looked at a sept one yet.

 

[felix]

Thanks for the posts, NetAssets, particularly the chart. I had until recently skipped all the options sections in the books I've read in order to focus on the basics of trading. Then I started looking into CFDs and it's time that I learned more than the basics of options, too. It pays to be well-rounded.

 

[evanmit]

I made a massive mistake in diversifying too early. I currently hold shares in BSL, CCL and NAB all for roughly $750 each. Yes, $750 not $$7500.

This was an awful move looking back, as my brokerage (both ways) to get in and out of all 3 trades will be $197.70, meaning I have to get an average of 8% return to just break even.

If I had just purchased $2250 in one company rather than the 3, I would only need to return 3% to break even.

I am going to sell out of each block of shares as I reach its break even point, and then keep the money in my bank account until I can put down $4k-5k per block of shares, and hold fewer blocks but bigger ones.

Stupid way to go, but I guess its all learning. $3000 bankroll is NOT enough to make any decent trades at the same time