Stock FAQs

how to sell specific shares of stock

by Loraine Padberg I Published 3 years ago Updated 2 years ago
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  • Decide whether you’re a trader or investor. This comes down to how long you plan on holding onto your stock. ...
  • Use an online broker. Online brokers make it easy and convenient to sell your stocks.
  • Test out the trading platform. Make sure the broker you select allows you to trade how you want. ...
  • Make your sale. Use your brokerage to set your sale price and begin selling your stock.

The specific-shares method only works if certain conditions are met. The method requires that the investor has purchased multiple lots of the same security at different prices, is selling only some of the investor's shares in a stock, and has kept a record of the cost basis of each stock or fund purchase.

What is the best way to sell stocks?

The main types of sales-related orders include:

  • Market orders: These orders are sold nearly instantaneously at the current market price. ...
  • Limit orders: These orders set a minimum acceptable price, and the stocks will only sell if a buyer's offer meets that price (or goes higher). ...
  • Stop orders: These orders will only sell a stock if the price drops to a seller's chosen level. ...

How do I Sell and buy shares in share market?

These sites do recommend shares to buy, so are a decent place to start your research:

  • ADVFN – Live news, lists of gaining and losing companies, company-by-company performance charts, news and discussion forums.
  • Hargreaves Lansdown* – Offers news, guides and tools – and you can download a free guide on how to select shares. ...
  • Interactive Investor* – Offers information, news and a discussion forum.

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What is the best place to buy shares?

Top 10 Best Shares to Buy Right Now

  1. British American Tobacco (JSE) – Best Long-term Investment. Dividend yield: 7.64% YTD return: -5.11% Although British American Tobacco has its primary listing on the London Stock Exchange, the cigarette ...
  2. Naspers (JSE) – Best South African Stock for Positive Returns. ...
  3. Netflix (NASDAQ) – Global Studio with a Growing Audience. ...

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How to decide which shares to buy at stock market?

The five forces are:

  • Threat of new entrants – how easy is it for new companies to enter the same market? ...
  • Threat of substitutes – to what extent can the company’s product be substituted for another? ...
  • Bargaining power of buyers – how much power do the company’s customers have? ...
  • Bargaining power of suppliers – how much power does the company’s suppliers have? ...

More items...

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Can you choose which shares to sell?

Thus, you can pick and choose among the high- or low-cost, and long- or short-term, shares when you sell—and make the sale work to your best tax advantage. Alternatively, you can go with the automatic default method, which requires less effort on your part, but could cost you more in taxes.

Can you sell specific lots of stocks?

Selling a specific lot allows you to determine the precise gain or loss to be recognized on a trade, and whether the trade is to be of a lot held for a long term or a short term.

How do you sell individual shares?

If you hold shares directly, you can sell them by placing a trade online or contacting your broker. You pay a fee each time you make a trade. You exchange the legal title of ownership when you sell shares. Settlement for the sale and transfer of ownership happens two business days after the trade (known as T+2).

Can I sell only part of my stock?

One of these tools is the ability to sell your investments either partially or totally. Selling partially means that you're selling a portion of your shares while keeping some in your investment portfolio. This means that you can sell a specific dollar amount of the shares you own.

Can you sell specific-shares for tax purposes?

The specific-shares method is a trading method used by investors for tax purposes and to reduce tax liability for a particular year to the barest minimum. Through this method, investors maximize their capital gains or capital losses when selling some parts of the shares of a company or fund.

Is it better to sell FIFO or LIFO?

The main benefit of the FIFO method is that by using the shares you acquired first, you're more likely to get long-term capital gains treatment for any profits that you earn.

Do you need a broker to sell shares?

You may assume that to sell shares in Australia that you need to hire an expensive stockbroking firm. This isn't necessarily true. To sell ASX-listed shares in Australia you will need a broker or broking service to execute the trade for you, but the sale can sometimes be completed by using an online broking service.

How do I sell stock immediately?

Market sell order. This type of order allows you to sell the stock immediately and it guarantees that the order will be executed without specifying the price of execution. Market orders typically get filled at or near the bid price when selling stock, just as they are filled near the offer price when buying.

What is the best time of day to sell stock?

The opening 9:30 a.m. to 10:30 a.m. Eastern time (ET) period is often one of the best hours of the day for day trading, offering the biggest moves in the shortest amount of time. A lot of professional day traders stop trading around 11:30 a.m. because that is when volatility and volume tend to taper off.

What happens if I sell half my shares?

Selling half after a stock's price doubles makes sense in a high-risk investment such as a penny mine. That way, you get back your initial stake. This can give you a clearer perspective on what to do with the other half of your investment.

Are fractional shares worth it?

Fractional share investing lets investors buy less than a full share at one time. This can be helpful when share prices are too high for an investor to be able to afford. It also makes it easier for investors to invest very precise amounts in a company.

Do I have to pay tax on stocks if I sell and reinvest?

Q: Do I have to pay tax on stocks if I sell and reinvest? A: Yes. Selling and reinvesting your funds doesn't make you exempt from tax liability. If you are actively selling and reinvesting, however, you may want to consider long-term investments.

What is market order?

Market order. A request to buy or sell a stock ASAP at the best available price. You want to unload the stock at any price. Limit order. A request to buy or sell a stock only at a specific price or better. You're fine with keeping the stock if you can't sell at or above the price you want. Stop (or stop-loss) order.

What happens if you set a limit price?

If your limit order is for $41, your order will execute only if the stock trades at or above $41. The risk: You could end up not selling if the stock never rises to your limit price.

What happens if your stop price is $38?

If your stop price is $38, your order will execute as a market order if the stock price falls to $38 or less. The risk: You could sell for less than your stop price — there is no floor. Also, a temporary drop in price may trigger a sale when you don’t want it to.

What to do before selling a stock?

Before you sell your stock, consider your reasons for selling it. Be sure you’re not acting on impulse because of an adverse market move, especially if you’ll incur a loss. Remind yourself of the reasons you purchased the stock in the first place. Be patient and try to research why the adverse move occurred.

How to sell stock certificates?

In order to sell stocks in certificate form, you must take them to a licensed broker/dealer to sell for you.

What to do after you transfer stock to trading account?

After you have transferred your stock into a trading account, you can then choose a price level and place a sell order for your stock or just sell it at the market.

How to day trade stock?

Make sure the broker you select allows you to trade how you want. If you’re going to be day trading, pick a broker known for speed. If you’re a beginner, start with a broker with great resources an educational tools. Make your sale. Use your brokerage to set your sale price and begin selling your stock. Contents.

What is market sell order?

Market sell order. This type of order allows you to sell the stock immediately and it guarantees that the order will be executed without specifying the price of execution. Market orders typically get filled at or near the bid price when selling stock, just as they are filled near the offer price when buying.

What is a sell stop order?

A sell stop order triggers an execution once the stock reaches a certain price below the prevailing market, known as the stop price. Upon the market reaching and trading at the stop price, the sell stop order then becomes a market order to sell the stock at the best available price. Trailing sell stop order.

Why do you sell tax lots?

Because you can choose the tax lot (s) you are selling, selling specific shares gives you more control over the gain or loss realized by a sale. If you sell tax lots with higher cost, you may expect a lower realized capital gain. Conversely, if you sell tax lots with lower cost, you may expect a higher realized capital gain.

Can you trade specific shares?

Trading Specific Shares. If your account is eligible, you can choose specific shares when trading stocks, options, or mutual funds. Valid trades include selling or exchanging mutual funds, selling or buying to cover stocks, and buying or selling options to close.

Can you specify more shares than total?

You can't specify more shares than the total for the order. If you specify fewer shares than the total for the order, Fidelity will calculate the gain/loss for any unselected shares based on the first in, first out cost basis method. Top.

What is a sell order?

Types of Sell Orders. The most basic way to sell a stock comes through what’s called a sell order. Once you know you're going to place a sell order, you've got to decide what type of sell order you'd like to place. The main types of sales-related orders include:

How many types of sell orders are there?

There are three types of sell orders to choose from when selling your stock. It helps to work with a financial advisor to understand your stock’s value better if you’re unsure. There are many techniques for helping you decide when to sell a stock, but the best one is to set a target price and sell the stock when it hits it.

What are the types of sales related orders?

The main types of sales-related orders include: Market order: These orders are sold nearly instantaneously at the current market price. The benefit is that orders are executed as quickly as possible. The downside is that you'll have to accept the lowest buying price currently offered on the market.

What is buy and hold strategy?

This is known as a “ buy and hold ” strategy, and it's favored by billionaires like Warren Buffett and Charles Brandes. When you finally decide to sell, you'll know how to execute the order with just a couple of taps, clicks, or conversations.

Do investment apps charge commissions?

First-time traders are particularly fond of playing the market this way, as many investment apps do not charge commissions on trades. Some apps are offered by relatively new financial companies, such as Robinhood, while traditional brokerage firms also offer their take on trading apps.

Do you have to formalize a sell order?

You don't have to formalize it in a sell order—it could be as simple as jotting down your thoughts on a sticky note at your work desk. For example, you may have bought a stock at $20 per share, and set a goal to sell when the stock hits $30 per share.

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Why is it important to identify shares?

The most basic advantage of employing specific share identification is that it allows investors to minimize gains, maximize losses, or realize long-term rather than short-term gains. All of these events will lower an investor's tax bill.

What is specific share identification?

Specific share identification is an accounting strategy for investors who wish to optimize their tax treatment when selling off their holdings in a particular company or fund which were originally purchased at different prices and different times .

What is tax harvesting?

Tax-loss harvesting occurs when an investor sells shares at a loss in order to offset a capital gains tax liability. One downfall of the specific share identification accounting method is that it requires the investor to be incredibly meticulous in their record-keeping.

What is a stock lot?

A stock lot, share lot or tax lot refers to a group of shares of stock that you bought at the same time. Picking out a particular set of shares to sell first may affect your tax bill, since you generally pay capital gains tax based on how much the shares went up or down and how long you've owned them.

What is a lot in stock market?

A lot, by definition, is a group of shares purchased at the same time. In the past, a round lot size, usually a number of shares divisible by 100, could sometimes be bought and sold more easily or with cheaper commissions, but this is less true with modern stockbrokers and electronic trading. When you go to sell shares of a security, you will be ...

What is the wash sale rule?

Instead, the would-be loss is added to the tax basis of the newly bought stock as if it were part of the transaction cost, so the loss is essentially preserved until you sell the stock more permanently. Keep this rule in mind when you're calculating your capital gains and losses.

Can you roll over capital gains?

You can use this to offset other capital gains and, if you don't have enough capital gains, deduct up to $3,000 of your loss from your ordinary income. You can roll over unused capital losses to future tax years to defer capital gains or take further deductions. If you own multiple lots of a particular stock, the ones you sell will affect your ...

Do you pay taxes on shares of a security?

When you go to sell shares of a security, you will be required to pay tax on any gains your shares have seen in the time you owned them, minus the transaction costs involved in buying and selling the shares. You'll pay long-term capital gains tax, generally at a lower rate , if you've held the shares for a year or more.

What is the basis of a stock?

Answer. The basis of stocks or bonds you own generally is the purchase price plus the costs of purchase, such as commissions and recording or transfer fees. When selling securities, you should be able to identify the specific shares you are selling.

Can you use the basis per share to figure gain or loss on the sale of stock?

The basis of the shares you acquired first, then the basis of the stock later acquired, and so forth (first-in first-out). Except for certain mutual fund shares and certain dividend reinvestment plans, you can't use the average basis per share to figure gain or loss on the sale of stock.

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What Is The Specific-Shares Method?

Understanding The Specific-Shares Method

  • The specific-shares method can minimize the size of a capital gain or maximize the size of a capital loss, for tax purposes, when selling off shares of a company or fund. It works by choosing to sell specific shares when reducing one’s position in a stock. Selling the shares with the highest cost basis (i.e., the shares the investor paid the most f...
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Choices Within The Specific-Shares Method

  • Though it is generally in the investor’s interest to choose the highest-cost shares to sell in the specific-shares method, there are exceptions. If the highest-cost shares were purchased within the last year, choosing to sell them in the specific-shares method would count as a short-term capital gain, which is taxed at income-tax rates, rather than the lower capital gains rate.1 In su…
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