Philippine Stock Exchange


Monday, October 11, 2010


       To become an owner of a banking company, a mining company, a holdings company or your favorite foodchain company might be one of your "dream" but you can not achieve because financially you are "not yet" capable. So why not own first a share of the pie? Take some shares and be one of the "little" owner of your dream company by investing in stocks. After reading some of my previous post, you might be interested now on how I do my transactions (buy/sell stocks) online. I could not explain further here on how to apply for your account on which broker you wanted as I only have one broker at the moment. Anyway, on my previous post I included there the list of online stock brokers which you can just click their photo to reach their website. FAQs and Instructions on how to apply are usually in their main page. Also, you might want to visit our KFAM stock investing thread  as some of our friends there could help or guide you on your application.
       I am not in anyway connected to Firstmetrosec but since they are my online broker, the example that I'll be discussing here would be on how I do transactions thru them.
       Once my application with them was approved,  I can start transferring funds into my portfolio from my Metrobankdirect account (you need to have a bank account first with them,their maintaining balance is 2000 pesos only). Let's say, I transferred only 5000 pesos to my funds and I decided to buy my first stock..
       If I wanted to buy the maximum number of shares of EXAMPLE Company (STOCK CODE: XYZ), I will type the XYZ on the CODE space then tick the buy. If I only have initial cash of 5000 pesos for buying , I need to know first the cost/share and no. of shares/board lot. How would I know how many shares I could buy then? At the bottom of my blog, there is the NTS Board Lots and Price Fluctuations where it is shown there the minimum board lot I could buy at a certain price range. If the price of the stock is within the range of 5 to 9.99 pesos, I could only buy by 100 shares (1 board lot = 100 shares). If the price is within 0.05 to 0.249, then I could buy only by 10 000 shares (1 board lot = 10 000 shares) and so goes with the other price ranges. If I want to use my 5000 pesos cash to buy my XYZ at my Bid of 0.50 (say 0.50 was the price of XYZ at the time I wanted to buy some shares of it), I could buy 10 000 shares right (5000/0.50=10 000)? WRONG! hahaha! Of course I need to reconsider also the charges by my online broker (most probably around 23 pesos only for the maximum number of shares with my budget of 5000 pesos). So, the maximum shares I can buy with my 5000 pesos would be 9 000 shares. Why? It is because 1 board lot  (1000 shares) at the price of 0.50 pesos is worth 500 pesos and 9 000/ 0.50 = 4500 + 23(charges) = 4523 pesos. The balance of 477 is not enough to by 1 more board lot of XYZ. This is only for normal transactions of course.
       After that, just I reconfirm my order and then wait...... IF the transaction is okay and my bid was hit ( It was matched with sellers at my bid price). Presto! I have 9000 shares of XYZ! 
       Before I forget, BUY LOW AND SELL HIGH!

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