stockmarket question

[galeniko]

so after watching wolf of wallstreet(life biography of couple getbigger packed into one huge movie plot), im wondering if the processes of selling stocks in the movie are same in reality.

i mean,the brokers provision they get.

for the penny stocks,50%, for the blue chips 1%, right?

so its said in the movie.

the question is simple, if the broker sells say 10k usd worth of penny stocks, he gets to keep50% of that money after administration costs etc?

or if one invests 100k usd in blue chips, he gets to keep 1% ,or 1000usd?

that means the money the buyer pays, some of it goes straight into the brokers pocket?no matter if the stock fails or does bad later on?

so what is the buyer paying for exactly?doesnt the company owner get any of that money?

serious question,am totaly confused

[Shockwave]

The answer is 7.

[Mr. MB]

Your broker gets paid buying AND selling. You can go thru your own bank and set up a retirement plan stock account and pay minimal fees. Most 401Ks are invested in the stock and or bond market. Again minimal fees. See your banker or 401K manager for specifics.

[Rambone]

[Grape Ape]

The Wolf's scam was as follows (this is from memory, so there may be holes in it, but I think I got the gist of it)

His firm would underwrite new stocks for IPO at $5 per share
I believe the firm who underwrites it, legally can only own 5%of the stock.
He would have other firms, people, etc that he would guarantee shares of the IPO, IF they promised to sell it back to him at $6.  The buyer gets to make 20% ($1) risk free for doing nothing.
The street sees that the firm is buying back all the stock at $6, so the street assumes  they value the stock more, so the price gets artificially inflated and so on......

His traders make a shit ton of commission, and the firm makes a shit ton in sales.

For galeniko's question, the spread between the bid / ask was huge on the pennies - i.e. stock was .39 cents, but cost 60 cents to buy, so the broker got to keep a lot more.  (I think it's something like this - I'm not in the market).

[galeniko]

The Wolf's scam was as follows (this is from memory, so there may be holes in it, but I think I got the gist of it)

His firm would underwrite new stocks for IPO at $5 per share
I believe the firm who underwrites it, legally can only own 5%of the stock.
He would have other firms, people, etc that he would guarantee shares of the IPO, IF they promised to sell it back to him at $6.  The buyer gets to make 20% ($1) risk free for doing nothing.
The street sees that the firm is buying back all the stock at $6, so the street assumes  they value the stock more, so the price gets artificially inflated and so on......

His traders make a shit ton of commission, and the firm makes a shit ton in sales.

For galeniko's question, the spread between the bid / ask was huge on the pennies - i.e. stock was .39 cents, but cost 60 cents to buy, so the broker got to keep a lot more.  (I think it's something like this - I'm not in the market).

ah thx, im aware of how some various scams work i read one fantastic book on that

but hell, even the legal part is good.or rather, used to be.

still hard to understand for me, you say the stock costs 39 but they can sell for 60,how comes, who establishes the wroth of that?

and does the company owner get any of the money?or is the owner the stockholder?

damn, widely interesting this whole thing, should have become a banker

[affeman]

 

[Spike]

all you need to know about stockmarket thanks to ben Affleck

your welcome

[/youtube]

[galeniko]

yes i know its all a guessing game and semi fraudulent at times, but i want to know the mechanics and legalities of this.

those movie quotes are fine and all, but basicaly im asking where the broker takes the money from, what the buyer of stock gets in exchange and what the company owner get.

[ESFitness]

yes i know its all a guessing game and semi fraudulent at times, but i want to know the mechanics and legalities of this.

those movie quotes are fine and all, but basicaly im asking where the broker takes the money from, what the buyer of stock gets in exchange and what the company owner get.

investor pays fees to the firm, firm pays fees to the broker for executing trades.

I've never used a broker and always executed my own trades with discount brokerages. much lower fees = greater profit.

[SOMEPARTS]

[RustyTrenbolona]

Executing an order aka buying a stock costs a fee to the buyer or client. Depending on your bank, the fee is a different percentage. Usually starts at 1 to 1.5 pc for 50k or less. The more capital you invest through them the lower they pc. 1 million will be about 0.2 pc. The percents can be bargained a tad down only if you are a worthy wealthy customer to the bank or firm. AND this fee will be charged for purchase and for sale. So you will be raped on entry and exit regardless of the equity or whatever you bought goes up or down. Basically you gotta double the percent to calculate how much the play is costing you on the buying and selling side of it.

In the usa, you have online discount brokerage where they charge you as little as 7 or 8 bucks per trade (in then out). They trade in volume. I suppose there are more granpas and laypeople playing around with a couple hundred bucks on their laptop at home.

In Europe the banks and brokerages are still fuckin around in the dark ages. Because before computers and pressing enter, the firm actually had to perform a service such as send someone down to the floor to buy or sell the physical paper on which the security etc was printed and the name of the owner and all that.

The last fee is a safekeeping fee. this can be charged by a bank for example to safekeep your security title paper (unless you had them send it home) but now we are talking decades ago. With computers almost nobody takes physical delivery of a title paper.

So basically banking, and in their trading department, is all fees. Execution fees of 1.5 down to .2 pc depending how much you throwing their way and the bullshit the safekeeping fee or custodial fees.

So to make a profit off a stock if your fees are 2.5 ish percent, your equity must rise that much before you even see any return. And the bank is cashing in all the way to the bank lol for pressing spacebar and enter and a few digits. skimming the customer baby.

dont forget the biggest skimmer of all taxman sam. when its all said and done, the client has to accumulate wealth to invest by working, get skimmed by the bank, take ALL the risk, then pay taxman sam and olny then does the rape stop....

Bank trading and brokering is merely skimming investors by providing access to purchasing securities. The kicker is when you use them for advice and tips on stocks etc. THEN the fees jump up up and away. You can even let them manage all your assets then they will start to like you alot depending on how much moneys is in their fingers.

Lastly, they never ever take reponsibility for a losing trade either, and your money will never be refunded through their error which is hilarious.