Sunday, June 7, 2020

Why you should not be selling at just +1.5% gain

If you are a new trader in the PSE, please know that transactions (Buying or Selling) are not free. It has charges that you can consider as "sunk costs" and that also means, when a stock value goes down and you decided to cut losses, you do not only lose the difference but also lose money on the transaction itself.

The common charges apply for your all buy and sell transactions
 Fee TypeAmount  RemarksValue at PHP10,000 
 Commission 0.25%of the gross trade amount  25.00
 Value Added Tax (VAT)12% of commission3.00 
 PSE Trans Fee0.005% of the gross trade amount 0.50 
 SCCP Fee0.01% of the gross trade amount 1.00 
 TOTAL 0.295% of the gross trade amount  29.50

Selling adds another fe called the Sales Tax
  Fee Type  Amount  RemarksValue at PHP10,000
 Sales Tax0.6% of the gross trade amount   60.00


To ensure that you earn money from your trade, your break even price is 1.21% of your capital (without any buy or sell transaction charges). Until you reach this amount, you are earning almost nothing.

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