Good luck Burrocrat!
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Good luck Burrocrat!
Thanks ETF Talk, i was about to ask for an account thread but you were way ahead of me.
11/09/09 Bought SCHA at $25.65, filled 9:30 am, brokerage account.
11/09/09 Bought SCHX at $25.52, filled 9:30 am, roth ira acount.
I placed market orders before the open looking at 11/06/09 closing prices, SCHA $25.00 and SCHX $25.12, looks like they both opened up significantly when my orders got filled.
I should probably have known the answers to these questions before i jumped in the water without looking, but at least the pool is only ankle deep, so the worst i could do is break my ankles right? lessons learned:
1) obbiously etf's are a different animal than regular mutual or tsp funds, i was used to buying closing prices and got burned by a large gap up open by placing a market order before the bell. note to self, purchase the market when the market is open.
2) i notice on the trade confirmations that one of the funds had a -0.01 discount and one had a 0.08 premium. i guess this means i paid that much more (or less) per share than the market price? i did not notice this info when i placed the trades, will have to pay more attention next time.
3) we are talking only a few hundred dollars per trade so i put all my available cash in up to an even number of shares, account summary shows i now own the shares but trades don't settle until 11/13, most of my balance is tied up in unsettled funds. what happens if i want to sell before then? do i have to wait until it settles to sell the shares? if i can sell before settlement, and then have two unsettled transactions, do they just keep a running tally of what happened when and eventually i realize a net gain or loss? if so, can i continue to do this multiple times? i read a thread by xlentlady about never trading with unsettled funds but don't understand why, i wonder if i'm about to learn another lesson the hard way here?
4) trade confirmation says schwab acted as my agent on this transaction, did i buy their own shares from them at a big gap up plus premium, or did i get these from a actual private owner of the shares? no fees no limits sounds enticing but apparently the game is structured in favor of the house?
I like the freedom these accounts offer and think i can utilize it to my advantage, but obviously there are some details i need to get more familiar with to maximize the opportunity here.
11/17/09 Sold half of shares SCHX at $26.14, market order filled immediately at 3:01 pm, net profit $0.62 per share, +2.43%.
Kept half of the originally purchased shares still in, made the transaction mainly to figure out what happens on the sell end of things. Premium said $0.16 and last price at $26.18. I got $26.14 and a note that said 'estimated exchange fee 0.01'. Still don't understand the premium/discount thing, i know i paid much more than last closing price when i bought in, big gap up open and maybe the premium thing, or is that reflected in the price of the shares real time?
Oh well, made more than if i'd kept it in cash. No transaction fees, i can so far trade as often as i want, see the results of the transaction right away and not have to use the crystal ball by 10:00 am MT to figure out where it might close that afternoon. I wonder if i do a lot of these small transactions if they will cut me off or start charging per trade? Maybe make me do a normal/larger number of shares like 100 as in stock trades? Do they still make you buy stock in lots of 100 or has that changed in my years away from the private investment market?
Hey Burro, welcome. Haven't been here in awhile. Saw your question about discounts and premiums. Not quite what you were thinking. Discount means the ETF shares are undervalued/oversold relative to their Net Asset Value (NAV)and likely that the bigger traders will start buying to push price back up closer to NAV.
If the ETF is currently at a premium over NAV, then its more than likely the bigger traders will sell it down soon to push the price back to NAV or closer to it anyway. Not a good idea to buy at a premium in other words. Better to buy while discounted. The closer the price is to NAV, the more likely it could go either way short-term, but also the more likely you are buying at actual value. Hope that helps.
11/19/09 bought SCHF at $25.54, roth
thanks alevin, that makes more sense. so a premium means i am paying more than the underlying securities are worth, discount means ETF is on sale relative to it's holdings, and one can expect things to move closer towards nuetral around the true NAV.
i should have checked the forum before i made the last trade. $0.25 premium, oops. at least the price you see is the price you pay, i was worried the premium/discount was being added to the quote price when placing an order, eliminates some confusion there.
11/24/09 sold half of shares SCHF at $25.76, +0.86%, roth.
I realize these small trades don't make sense when transaction fees are involved, but i've been trading commission free no limits, just going to keep stair stepping small gains up until they tell me I can't anymore.
It's a loss leader i'm sure, only for Schwab clients, only on Schwab funds (limited offerings), only for online trades.
Buy hey, they track basic indexes, indexes move up and down, i can move in and out, for free, any time i feel like it.
Regular prices are $13, or $9 if you do 120+ trades per year, that's a lot to pay for a little hand holding, i don't think most on this board need much of that, even competitors at $7 is steep to me. it will take some time (and more expertise on my part) before i can acquire the resources and identify smarter instruments to make that economical.
Unlike when i was younger and more idealistic, now if it moves and i can hit it i'm in there, get some.
On the bright side, excellent customer service, i can move money from outside bank account into checking (pays 0.75%), brokerage, or roth ira. Once in i can move between accounts freely on a one-time or recurring basis. Can also withdraw to outside bank from any account, no debit fees, free checks, sounds too good to be true, what have i got to lose, something has to give here sometime, but so far i've been taking.
trying something new here, trying to ride the holiday sentiment. at about 11:10 am ET i placed day-only limit orders for:
SCHA at 25.80, trading at 25.68, basis = 25.65
SCHX at 26.25, trading at 26.11, basis = 25.52
SCHF at 26.20, trading at 26.12, basis = 25.54
thought about pulling the trigger then but it always goes higher after i sell. of course that could happen with a limit order too, but at least i would get a price i've already decided i'm comfortable with. then again maybe i set the targets a little high. if all of these go through then it's all cash position, if not maybe black friday will show me some green.
11/25/09 sold remaining 1/2 of original position SCHF at 26.20, limit order filled at 2:51 pm, +$0.66 per share, +2.58%.
Average profit for this position in a 2-part sale is $0.44 per share, +1.72%.
SCHX and SCHA didn't get near the limits i set. That limit thing is cool, don't have to keep watching, and don't get burned by a spread - placing market order at a last price and getting a few cents less.
11/27/09 bought SCHF at $25.43 put half of stake back in.
also have an open limit order for the other half at $25.20
limit order for SCHF didn't fill. wish i had sold SCHA and SCHX wednesday when i had the chance, gonna have to wait a bit for them to cross to the upside it looks like.
so, Burro, who are you trading with for your commfree trades? Mine cost $15/trade plus 1% annually.....maybe I need to move my accounts or open another....
charles schwab online, fits my low stakes game, open an online checking linked to brokerage account and no minimums, checking pays 0.75%, free checks and reimburse debit card fees, also opened up a roth ira to shuttle extra tsp contributions, backed that down to 5% and matching funds, all extra goes to roth, brokerage, and checking at 5% each, trying to build a cushion here.
lots of 'one-source' mutual funds have no sales fees if you hold them 6 months, most ETF's cost 12.95 per trade, discount for high volume traders. you can trade schwab ETF's for free, only four offerings, with 4 more coming in december.
basic index plays here, not the sharpest tools in the shed, but playing with them for free. transaction fees and expense ratios would kill me on any other offerings at my levels. full range of trading options, market, limit, stop orders etc.
simple strategy, play bounces for 1-2% gains, keep bi-weekly contributions flowing, grow the balance.
adding to positions across the board:
11/30/09 Buy SCHA at 24.91, -0.54 discount, brokerage;
11/30/09 Buy SCHX at 25.72, -0.39 discount, roth ira;
11/30/09 Buy SCHF at 25.45, -0.59 discount, roth ira.
anyone have ideas on how to play natural gas long over an extended time horizon? maybe 6 months to 2 years? without options or futures? no margin capabilities and don't know enough about contracts to commit real money.
i think excess supply will pull demand in it's favor, how low can it go?
I own UNG - but is killing me because it is not moving with the price of Nat Gas as it is supposed to.
brokerage website shows:
roth ira account +2.27%.
brokerage account +0.55%.
I don't know if these are exactly right, something seems missing here.
I've just been doing some simple math: current account value - contributions in / contributions in = %.
Santa is bringing me some new software so i will input trade history and see how it shakes out.
Pretty sure the numbers will come out positive though.
Now if my latest payroll contributions would clear i might have enough to justify commissions on a real investment.
Looking at natural gas on a multiyear time horizon, but it would chop 1.5% of my current balance on both ends of the trade, gonna take a pretty big jump to the upside to make that economical.
researching possibilities anyway.
well they've all moved higher since i pulled the trigger, dammed if you and dammed if you don't.
i don't like the little hit you take on the bid/ask with market orders, but the market seems to know when i placing limit orders and runs right past me.
profits is profits i guess, just goes to show i'm not as good at miming the tarket as i think i am.
not much fancy charting skills here, although it all goes into the mix, mostly a sentiment trader, the market after all is just a social construct.
Just had to go and tempt fate there didn't I?
12/01/09 Buy UNG at 9.04
profits from the recent free trades cover the transaction fee in, it will be up to the fund to carry the fee out and any gains.
checked out general energy plays as well as GAZ and UNG. UNG has lower expenses and more upside potential in my opinion.
target is $9.25 to cover commissions and grab minimum 2%.
buy and hold for the roth account here, slowing down a bit, new contributions should clear in a couple of days, will start again with free trades then.
Commission free? Where do you trade?
dang i feel like i'm schilling for the brokerage site here, not my intention, there is a narrow window of opportunity for these trades but it has so far been profitable, sounding like a broken record, for the record:
schwab online allows clients to trade their in-house ETF funds with no commission but only four qualify for the deal, SCHB, SCHA, SCHX, SCHF, and they say they will add four more this month, mostly foriegn markets variations. trading these have allowed me to get familiar with the site and different types of orders without losing money in fees everytime i make a move.
The last trade on buy UNG cost 12.95 commission, and will cost another 12.95 when i sell. I set a minimum price target out that will net even, justified paying the transaction costs on that one because the small gains i made on trading the clunky SCH- funds can cover it.
That was more of a buy and hold type purchase to get commodities diversification in one of my retirement accounts, i will not be trading at 12.95 tax on both ends very often, need to move a large quantity of shares each transaction for that to be economical.
my strategy is to continue to identify a trading range/channel on the simple SCH- index funds, and pick off the highs and lows for a couple of percent each time. at my balances ($500-$1000 per trade) that only works when you are not paying commissions. but it does work.
OK, thanks.
12/09/09 Buy SCHF at $25.37, regular brokerage account.
two new schwab funds to play with came online today.
SCHV: large cap value
SCHG: large cap growth
a couple more ways to fine tune the free trades, 6 funds total now.
Do these funds have redemption fees?
nope, only charges to my account on SCH- ETF's have been 'exchange fees' when selling, just a few pennies depending on how many shares, i'm guessing this is a market tax of some sort.
12/14/09 Sell UNG at 9.93, almost +10%, but trading commissions ate a good chunk of that.
That trade made me nervous, thought i'd taken a close look at it when i made the decision to buy, but soon after became aware of other factors that i didn't consider, what the heck is contango anyway, though i still think there is a lot of upside there. Paying trading commissions is only going to work for me on a long-term buy and hold, and that one wasn't it.
Bottom line is i know i didn't understand the investment and was uneasy every day it was in the portfolio, had to jump off the boat while we were in shallow water and i still had the positive return life jacket on.
Whew, i feel much better now.
12/14/09 Sell SCHG at $25.81, +$0.44 per share, +1.7%.
All cash positions now in brokerage and roth accounts, should see some volatility in the next few weeks to get back in, freeing up funds for a possible move on SLV or GLD if the right opportunity presents itself.
oops, reread last post and it should be sell SCHF, not G. haven't bought SCHG yet.