Your broker charges $0.0011 per share per trade. The exchange charges $0.0065 per share per trade for removing liquidity and credits $0.0047 per share per trade for adding liquidity. The current best BID price for stock XYZ is $62.73 per share, while the current best ASK price is $62.74 per share. You post an order to buy XYZ at the current best BID price and wait. Shortly after, the best BID and ASK prices move lower (down) by one cent each. Your buy order is executed. Immediately, you post an order to sell XYZ at the new best BID price, and your sell order is executed. What will be your net loss per share to buy and sell XYZ after considering the commissions and any exchange fees or credits?
Your broker charges $0.0011 per share per trade. The exchange charges $0.0065 per share per trade for removing liquidity and credits $0.0047 per share per trade for adding liquidity. The current best BID price for stock XYZ is $62.73 per share, while the current best ASK price is $62.74 per share. You post an order to buy XYZ at the current best BID price and wait. Shortly after, the best BID and ASK prices move lower (down) by one cent each. Your buy order is executed. Immediately, you post an order to sell XYZ at the new best BID price, and your sell order is executed. What will be your net loss per share to buy and sell XYZ after considering the commissions and any exchange fees or credits?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
M1
![Your broker charges $0.0011 per share per trade.
The exchange charges $0.0065 per share per trade
for removing liquidity and credits $0.0047 per
share per trade for adding liquidity. The current
best BID price for stock XYZ is $62.73 per share,
while the current best ASK price is $62.74 per
share. You post an order to buy XYZ at the current
best BID price and wait. Shortly after, the best BID
and ASK prices move lower (down) by one cent
each. Your buy order is executed. Immediately, you
post an order to sell XYZ at the new best BID price,
and your sell order is executed. What will be your
net loss per share to buy and sell XYZ after
considering the commissions and any exchange
fees or credits?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbf688ab6-7c8c-4bbd-bad0-9eb08c6ca5d5%2F0f7a7928-6393-4554-8549-6c8126a19bf0%2Fjoxy4lo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Your broker charges $0.0011 per share per trade.
The exchange charges $0.0065 per share per trade
for removing liquidity and credits $0.0047 per
share per trade for adding liquidity. The current
best BID price for stock XYZ is $62.73 per share,
while the current best ASK price is $62.74 per
share. You post an order to buy XYZ at the current
best BID price and wait. Shortly after, the best BID
and ASK prices move lower (down) by one cent
each. Your buy order is executed. Immediately, you
post an order to sell XYZ at the new best BID price,
and your sell order is executed. What will be your
net loss per share to buy and sell XYZ after
considering the commissions and any exchange
fees or credits?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Foundations Of Finance](https://www.bartleby.com/isbn_cover_images/9780134897264/9780134897264_smallCoverImage.gif)
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
![Fundamentals of Financial Management (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781337395250/9781337395250_smallCoverImage.gif)
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
![Corporate Finance (The Mcgraw-hill/Irwin Series i…](https://www.bartleby.com/isbn_cover_images/9780077861759/9780077861759_smallCoverImage.gif)
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education