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Thread: Burrocrat's Account

  1. #1

    Join Date
    Dec 2007
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    Default Burrocrat's Account

    Good luck Burrocrat!
    -- Tom | My Trades


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  3. #2

    Join Date
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    Default Re: Burrocrat's Account

    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.

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  5. #3

    Join Date
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    Default Re: Burrocrat's Account

    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.

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  7. #4

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    Default Re: Burrocrat's Account

    Quote Originally Posted by burrocrat View Post
    11/09/09 Bought SCHX at $25.52, filled 9:30 am, roth ira acount.
    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?

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  9. #5

    Join Date
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    Default Re: Burrocrat's Account

    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?

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  11. #6

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    Default Re: Burrocrat's Account

    Quote Originally Posted by burrocrat View Post
    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?
    Oops, sell date should read 11/16/09 there. No wonder things seemed a little off all day, and all those documents i signed and stamped today... on the bright side it looks like i got all my filing already done for tomorrow.

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  13. #7
    alevin Guest
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    Default Re: Burrocrat's Account

    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.

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  15. #8

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    Default Re: Burrocrat's Account

    11/19/09 bought SCHF at $25.54, roth

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  17. #9

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    Default Re: Burrocrat's Account

    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.


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  19. #10

    Join Date
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    Default Re: Burrocrat's Account

    Quote Originally Posted by burrocrat View Post
    11/19/09 bought SCHF at $25.54, roth
    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.

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