how many times per day does a broker trade a particular stock? (day trading)?
by Gary James on Wednesday, July 14th, 2010 | 5 Comments
I’m trying to figure out if and how often does a broker trade per day on the same stock? do they buy and sell for a few pennies’ chance on an particular stock to try to yield a small my repetitive profit?
Hey everyone, Gary here. Stock trading was never my forte'. I lost tens of thousands of dollars listening to stupid advice and letting other people trade for me.
Not sure what you mean by a "broker"
Usually a broker would mean "sales person", sales people are only permitted to "trade" on a very limited basis, They can not and do not "trade" for the firm and are prohibited from "trading" for any of the firm;s customers
Brokers can also mean, the broker/dealer. Not all B/Ds "trade" for themselves, they may take principal positions for further sales to clients.
B/Ds that are market makers, can trade a hundred times a day in a given security depending on the market and the particular stock.
Yes B/D can and do trade for pennies on a trade since they are constantly moving positions. B/D do however, have capital requirements which govern how much monies they allocate to trading positions.
Trying to relate what market makers and/or in-house traders to that of an individual is meaningless and can produce no useful program for the individual. Individuals have very different margin and/or loan requirements that professionals
been there, done that
anytime you make a trade you need to have a trading plan, you should know the average move of the stock per day, etc. you look at support, a price that the stock does not go below, and that should give you a buying point, added to that the average move and you are looking to get out. In addition you should use a stop loss as that maintains consistent performance, avoiding big losses is one of the keys to successful trading
Basically brokers don’t trade, they broker stocks for customers.
Brokerage houses do have trading desks that trade the company’s own assets. These are separate functions by law. There are a lot of SEC rules requiring separation to avoid any manipulation.
And those trading desks can be all over the place in types and strategies, like metals desks, options desks, different stock traders focusing on different sectors or industries, and different types of trading or investing.
They can also have funds that do trading and investing for the funds. Again, another separate function.
There is no definitive answer because they might take a position in a company or an IPO and hold it for a long time. While at the same time the Flash trades using computers trading on computed projected movement of stocks hold a stock for a micro fraction of a second trading millions of shares and with that they can trade in fraction of a penny.
So I doubt you can find the answer you want.
PS, I think flash trading is front running and a form of skimming to the detriment of the retail investor and should be outlawed.
It depends on the trader’s trading strategy, all traders trade differently. Some buy and sell only a few times a day, looking for good opportunities where they can make a significant gain each trade. Some do what’s called scalping (former scalper), and try and make 1 cent on a low priced stock, over and over and over again. Some do the same thing but trade on higher priced stocks, buying less stock at a time, but buying and selling repeatedly even more. In the office I used to trade in, I would trade anywhere from 100-400 times a day, it would vary. We had some traders that made 20-40 trades a day, and we had some that made nearly 1000. It is all dependent on your trading strategy. I hope this helps.
I won’t trade more then 57 trades in a day. My daily goal is 14 S&P Future pts.