How to Start and End Your Day Happily in the Negative
Here’s the weird thing about a ShareBuilder account with ING.
When you buy the stocks, you buy them at the price they are when you buy them. Common sense, right? But the prices of stocks fluctuate overnight. When I bought my Lehman Bros last night it was at $.13 and Fannie Mae was at $1.78. So my bank account was charged a grand total of $277 because of what the pricing was when I placed the order.
When the actual Buy Order went through this morning it went like this:
Lehman Bros – $.25 x 100 Shares + 14.95 comission = $39.95
Fannie Mae – $2.01 x 100 Shares + 14.95 comission = $215.95
For a total of $255.90
But since I’d only agreed to pay a total of $227 for both of the stocks, I started the day with a negative account balance. The difference between the opening prices and the prices when I made the order. A difference of $28.90.
So when I first logged in this morning and saw that my account was -$9.90 I felt pretty good about it. I’d already made back much of my loss.
There was a way around it
I could have found a way to trade on another market to buy the stocks. Australia is getting up while we are going to bed. It is possible I could have purchased the stocks through the Australian stock market (I don’t know if one even exists, just so you know, this is only for the sake of example.) That would have assured my purchases would have happened at the prices I wanted to the penny.
I haven’t started researching overseas trade, but I imagine it costs a little more to execute than the $9.95 it costs with ShareBuilder from ING. Even if I wanted to do a phone trade with ING it would cost $29.95! I’m happy sticking with the Internet.
Where I ended up when the market closed
When all was said and done at the close of the market (4:30pm CST) I was down in my ShareBuilder account by $29.90. While you could look at that and say, “Wow. Don’t you feel all freaked out being in the negative on an account?” I don’t.
Because I started out at negative $28.90 and ended at negative $29.90. I lost a dollar today.
Considering the bailout plan got shaky during the last hour of trading I’m surprised I’m not down a whole lot more. When Twitter reports were coming through that they had made a bailout deal before McCain could even get himself to Washington, DC everything spiked (as expected) and at my highest point today there was a whole $49.60 in the account. Not negative, either. A positive balance of almost fifty dollars. (Had I cashed out it would have meant I made $78.50 – the combo of covering the negative I started the day with plus the profit at the peak of the day.)
I don’t generally think in terms of how much I made when I wasn’t even planning on selling, I just want to make sure I’m being clear how I can be happy ending my day in the negative.
That and you and I both know I didn’t buy these stocks to sell them today. I bought them this morning JUST IN CASE the bailout somehow went through today. Lehman closed at .33 cents today when I bought it at .25. Fannie Mae closed at 1.97 when I bought it at $2.01. The slight differences between opening and closing prices (basically my stocks for all intents and purposes are almost exactly where they were when the market opened) when the overall Dow Jones closed UP 196 points tells me the market and everyone in it are probably going to stay about the same until something happens.
Like, oh…I don’t know….a bailout perhaps?
How I want to play this
That means my job is to wait. Wait for news that will make a difference in how these stocks act. Something that will make people feel one way or the other about them.
For now they are just kind of sitting. Flucutating a little based on the day’s news and any whisper coming out of those bailout meetings. But that won’t make the big difference.
I don’t really expect to even consider getting rid of these stocks until Monday.
Until then I plan on watching the Fox Business Channel. The mix of Dave Ramsey on one end of the spectrum and Jim Cramer on the other helps me stay focused on where I want to be.
Stuck in the middle with you. Of course.
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