Never Pay Full Price for a Stock

[billyjoe]

Never Pay Full (market price) for a Stock


OK, so you've done your homework, found the perfect stock, and are hot to make the buy. Wait a minute! How often have you bought a stock that has continued to advance without a dip from the moment you purchased it? I'd venture to say almost never. Put a limit order on the next great stock. At least at a point that will pay your transaction fees. High dollar stocks such as AAPL commonly have price swings of 5.00 either way so adjust your limit accordingly. On an under 10.00 stock, maybe .25 under market would be a very reasonable purchase point. Since I've been buying this way I've almost always got the buy. Sometimes having to adjust upward if the buy doesn't go through after several days but remember the market rarely has 5 consecutive days up and conversely rarely has 5 straight days down. And it feels like you're sticking it to the man when you get a great stock at your price.

-------------billy

[wooish]

Good advice Billy.

Another way to buy stock for even cheaper (could be up to 10% cheaper) is to sell cash-secured put on the stock that you wish to own and don't mind owning the stock long term (like Mr. Market's pick).

As an example, let say you want to buy 100 shares of AAPL (currently at $250.75) but let say you only want to pay $246. So instead of waiting for the price to come to you, you can sell the cash-secured August $250 put and pocket the $4.25 premium. On options expiration, if AAPL is over $250 you get to keep your $4.25 premium. But if AAPL falls below $250, you will have to buy the stock for $250 and since you pocket the $4.25 your cost is only $245.75.

Either way, you have an edge in your favor. It's like getting paid while waiting for a lower entry price.

[mrmarket]

Never Pay Full (market price) for a Stock


OK, so you've done your homework, found the perfect stock, and are hot to make the buy. Wait a minute! How often have you bought a stock that has continued to advance without a dip from the moment you purchased it? I'd venture to say almost never. Put a limit order on the next great stock. At least at a point that will pay your transaction fees. High dollar stocks such as AAPL commonly have price swings of 5.00 either way so adjust your limit accordingly. On an under 10.00 stock, maybe .25 under market would be a very reasonable purchase point. Since I've been buying this way I've almost always got the buy. Sometimes having to adjust upward if the buy doesn't go through after several days but remember the market rarely has 5 consecutive days up and conversely rarely has 5 straight days down. And it feels like you're sticking it to the man when you get a great stock at your price.

-------------billy

I wish I had your patience!!!~