Help: Combination of swing and day trading

Question

Hi all,

I am new to stock investing in US. I have a scenario here. Suppose $100 are used to buy a stock at $10 per share. If I sell the stock next day morning at $12 per share ($120 in total) each and then buyback the same stock in the noon at $8 per share (I understand that free riding is not allowed and I need to come up with cash to buy back the same stock), what is my position at the end of the day?

I can think of two scenarios:

1) At the end of the second day, I made a profit of $40 and still have my stock at $10 each (total $100).

2) At the end of the second day, I made a profit of $20 and now have my stock at $8 per share (total $80).

Please tell which of the above two scenarios hold, or, the position is yet something different that I could not even think of.

Thank you folks.

Answer 1

2 is correct

You buy at 10, sell it at 12, you made 2

You buy it back at 8, you own the stock at 8 and you still have the 2 profit you made yesterday

When you buy a stock, you must pay for it full before you sell it. If you sell it, your account is (should be) restricted for 90 days or until payment in full is made, and you can not use the proceeds of the sale to cover the purchase amount

Answer 2

None will work because your stock will not go up $2 the next day especially if it's a stock that could go down $2. Second you would need higher priced stock because $10 (low cap) stock shares donot move that way. You would need shares over $50 or buy a lot of the $10 stock. Third the idea you are referring to is called channel stock trading and no one every made any records trying it.

Answer 3

You're forgetting:

1. transaction fees.  typically, you only want to buy and sell $1000 at a time.

2. you can't predict what price a stock will go for.

3. capital gains taxes.

Meanwhile, If you buy the stock, and then sell it, you don't have to buy it back.  It almost sounds like you're talking about shorting a stock(selling a stock you do not own).  In which case, of course, the transaction fees are higher, as are the risks.   Might want to work on terminology there.

But, if you buy 10 shares at 10, sell 10 shares at 12, then buy 10 at 8, you have 10 shares (at whatever market price) and $40, from your original investment of $100.

Answer 4

sounds kinda risky....but if you do, I recommend an online brokerage firm that has good beginner qualitys {like tutorials or an easy to understand set up}, i use zecco, better then schwab, etrade, etc. they are the only ones with free stock trades, no minumums..all the others will charge you fees for trading, but compare and see for yourself. Good luck and happy investing!

http://friends.zecco.com/r/a7a2877caab81...