Cheap Online Trading

Six months ago, Susan and John (neighbors who invest together) bought a $1 penny stock. They each spent $500. And their orders were filled at the exact same price.

After trading even for months, the company came out with a strong quarterly earnings announcement a few days ago. Afterward, the penny stock rose to $2 in a hurry – doubling John and Susan’s money. As you might expect, the two decided to sell their penny shares. They immediately called their brokers and exited the trade – at the exact same price.

At the end of the day, John and Susan met at Starbucks to revel in their success. They pulled up their account summaries as they sipped on a skim latte. And to John’s surprise, Susan had more money in her account!

How could that be? They each invested in the same company. They each bought the hot penny stock at the same price. They each spent $500. And their brokers each got them at out the exact same price. Yet Susan’s account showed a balance of $986. And John’s account was worth $950.