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I have been invested in a telecom stock for the past year.

I buy the stock at ~$5.00 and sell the stock at ~$5.15. I'm roughly on a bi-weekly rotation - sometimes shorter depending on how the settlement period pans out - but that's my general strategy. Because the dollar amount invested is relatively high the 3% gain is not unsubstantial.

This has been made marginally more profitable because I'm now using an app touting no fee trades. While I would theoretically be accruing approximately 10-12% gains per month my actual realized gains are closer to the 3-5% range.

Which makes me wonder - should I stop the frequent trades and just ride it out long term? I have to wonder if there is any inherent risk or downside to this strategy?

  • Um, are you not worried at all about downside protection? You bought at 5, what if it goes to 3? Are you hedged? – Victor123 Apr 7 '15 at 18:30
  • I am, with stabler investments elsewhere. This is "play" money that I'm okay with putting into riskier ventures. – philwinkle Apr 7 '15 at 18:40
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Enjoy the free trades as long as they last, and take advantage of it since this is no longer functionally a tax on your potential profits.

On a side note, RobinHood and others in the past have roped customers in with low-to-zero fee trades before changing the business paradigm completely or ceasing operations. All brokers could be charging LESS fees than they do, but they get charged fees by the exchanges, and will eventually pass this down to the customer in some way or go bankrupt.

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