Is 1,000 shares per clip common?

jimclark · Sep 28, 2007

Is trading 1000 shares per trade common in day-trading? Provided account buying power is only $100,000?

There is no limit for share price per se...it could be a $5 or a $90 stock?

Thanks for sharing your experience.

wiesman02 · Sep 28, 2007

$100,000 buying power means your account size is $25000.

You can make your position size as high as you want. Although, the higher you go, the tighter the stop. I wouldnt risk more than a couple percent of your entire account.

jimclark · Sep 28, 2007

Quote from wiesman02:

$100,000 buying power means your account size is $25000.

You can make your position size as high as you want. Although, the higher you go, the tighter the stop. I wouldnt risk more than a couple percent of your entire account.

but it seems even 2% of entire account is way to high...for intraday trading.

No?

TOM134 · Sep 28, 2007

jimclark,

The amount of $ to wager on any particular trade is = to the normal (avg) # shares (contracts, etc) you see being traded.

Brokers and NY 'specialists' know what is not 'ordinary' for their trading instruments and will then come in for the kill.

I hope this helps.

Tom

lindq · Sep 28, 2007

Quote from jimclark:

Is trading 1000 shares per trade common in day-trading? Provided account buying power is only $100,000?

There is no limit for share price per se...it could be a $5 or a $90 stock?

Thanks for sharing your experience.

That all depends on the stock(s) you are trading, and the liquidity.

But...assuming that you are not limiting your price range or trading penny stocks, the average stock is roughly $35.

1000 shares is of course 35K. A stock at 35 can easily pull back 2 points in a day, or overnight. That will pull 2K out of your account, which is far beyond what your acceptable risk should be.

If you are scalping with tight stops, and you are good, you can get away with it. But anything beyond that and you are risking too much assuming 25K in your account. "Available Margin" has nothing to do with your acceptance of risk. You need to always be aware of your cash. Because without it, you are out of business.

sunggong · Sep 28, 2007

Quote from jimclark:

Is trading 1000 shares per trade common in day-trading? Provided account buying power is only $100,000?

There is no limit for share price per se...it could be a $5 or a $90 stock?

Thanks for sharing your experience.

I'm not sure that it's common because I don't know that many traders.

But when I used to trade with 25k, yes 1000 shares per trade was very common.

In fact, I often did 2000 shares per trade.

It's not too bad if you know what you are doing.

jimclark · Sep 28, 2007

Quote from TOM134:

jimclark,

The amount of $ to wager on any particular trade is = to the normal (avg) # shares (contracts, etc) you see being traded.

Brokers and NY 'specialists' know what is not 'ordinary' for their trading instruments and will then come in for the kill.

I hope this helps.

Tom

This a bit over my head...can you clarify?

Don Bright · Sep 28, 2007

Quote from jimclark:

Is trading 1000 shares per trade common in day-trading? Provided account buying power is only $100,000?

There is no limit for share price per se...it could be a $5 or a $90 stock?

Thanks for sharing your experience.

In general, we start our brand new boot campers with 200 shares, and by the end of 4 weeks, they are usually at 1000 Only if they have a solid comfort level and maybe more for the opening only trades.

The trading "standard" is about 2,000 for experienced traders, again, more on layered openings.

Of course "day-trading" is just part of an overall trading plan.

Don

edit: And as Tom says above, share size is also determined by stock price and liquidity.

stock_trad3r · Sep 28, 2007

4-1 margin is absolute suicide

If you have 25K, buy 100K of stock and it falls just ONE percent you LOSE 1K

ouch

andthen you have to pay micro-interest

interest comounded by the minute!

Don Bright · Sep 28, 2007

Quote from stock_trad3r:

4-1 margin is absolute suicide

If you have 25K, buy 100K of stock and it falls just ONE percent you LOSE 1K

ouch

andthen you have to pay micro-interest

interest comounded by the minute!

Why would anyone lose a whole dollar on an intraday trade? Pretty rare around here, except maybe for more sophisticated strategies where you might be making $1.50 on the other half of the pair or merger.

But, this is why liquidity and stock price have something to do with it. You're talking about $100 stocks, which very few traders bother with for day trading - too much slippage. A dime or two on a $30-$60 stock is not a big deal.

Don