SELLING STOCKS Investments 12.4

Vocabulary Profit – The amount of money you make over and above the initial money invested. Loss – The is the opposite of profit. Selling for less the initial money invested. Commission- Amount paid to the broker. Net sale – The amount of the sale after deductions are made.

Selling for a Profit or Loss? Reasons for selling to make a profit are obvious, but why would someone knowingly sell stock at a loss? Prevent further loss Emergency and she needs the money Personal reasons to no longer invest in a company Reorganizing her portfolio Change brokers

Formulas Needed Amount of Sale = # of shares × price per share Net Sale = Amount of sell – Commission Profit(Loss) = Net Sale – Investment If amount is negative, it is a LOSS! Commission = Fee Commission = # of shares × fee per share Commission = Cost of Stock × percent

Jacob bought 220 shares of Nintendo stock for a total of $22, Then he sold all shares for $ per share plus a commission of $ a) What was the amount of the sale? b) What was the net sale? c) What was the profit or loss? a) # shares × $ per share (220) × (109.50) $24,090 b) A mount of sell – Commission – $24, c) Net Sale – Investment – $1,288 Profit

Warren bought 50 shares of Volkswagen stock for a total of $12, Then he sold all shares for $ per share plus a commission of $9.95 plus $0.49 per share. a) What was the amount of the sale? b) What was the net sale? c) What was the profit or loss? a) # shares × $ per share (50) × (236.45) $11, b) A mount of sell – Commission – ( × 50) – (34.45) $11, c) Net Sale – Investment – $ Loss

After the divorce, Madison sold all 200 shares of Apple stock for $ per share plus a commission of 3.2¢ per share that Clayton and her purchased for $23,978. a) What was the amount of the sale? b) What was the net sale? c) What was the profit or loss? a) # shares × $ per share (200) × (124.45) $24,890 b) A mount of sell – Commission – (0.032 × 200) – (6.40) $ c) Net Sale – Investment – $ Profit

Questions?