1. The Stock Market
Week 5

2. Outside Expectations
One more week to complete your Charting Prices exercise based on a real-life stock.
Review Cloze Notes answers.
Add to your Agenda:
Figuring Commission
Buying Stock
Writing Ms. Drake a Commission Check

3. Stockbrokers
Stockbrokers are the people who buy and sell stocks for people.
The stockbroker must be licensed and charges a commission each time stocks are bought or sold.
Stockbrokers work at a stock brokerage (in an office or a building), but many transactions can be made over the computer or telephone rather than in person.

4. Commissions
A commission is money that you pay a stockbroker for buying or selling the stocks for you.
It is a percentage of the total sale.
The percentage of commission is determined by the amount of advice you receive and the type of service the stockbroker provides.
Stockbrokers who don’t give advice are usually called discount brokers and they charge a smaller percentage as a commission.

5. Why does that work? Figuring Commissions
To figure commission, you change the commission (which is expressed as a percentage), into a decimal and multiply that by the value of the total sale or purchase.
Ex. 5% commission on 1,000 worth of shares
.05x$1,000.00= $50.00
You change a percentage to a decimal by moving the decimal to the left twice.
Why does that work?

6. Another Example:
Imagine Gina bought 1,000 shares of Green Hope Financial’s stock for $5.00 a share. Her broker charged a 3% commission.
The sale was 1,000 x $5.00 = $5,000
The commission was 3% of the $5,000
.03 x $5,000=$150.00

7. Be sure to write down the information you will need before you
Buying Stock
Refer to the current listing of your classmates’ stocks and their current values. Complete the Buying Stock worksheet for 5 different corporations.
Be sure to write down
the information you
will need before you
leave class today!