1. SELLING STOCKS Investments 12.4

2. 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.

3. 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

4. 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

5. Jacob bought 220 shares of Nintendo stock for a total of $22,772.05. Then he sold all shares for $109.50 per share plus a commission of $29.95. 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 24090 – 29.95 $24,060.05 c) Net Sale – Investment 24060.05 – 22772.05 $1,288 Profit

6. Warren bought 50 shares of Volkswagen stock for a total of $12,390.85. Then he sold all shares for $236.45 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) $11,822.50 b) A mount of sell – Commission 11822.50 – (9.95 + 0.49 × 50) 11822.50 – (34.45) $11,788.05 c) Net Sale – Investment 11788.05 – 12390.85 $602.80 Loss

7. After the divorce, Madison sold all 200 shares of Apple stock for $ 124.45 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 24890 – (0.032 × 200) 24890 – (6.40) $24883.60 c) Net Sale – Investment 24883.60 – 23978 $905.60 Profit

8. Questions?