Can you buy and sell the same stock over and over again ?

Can you buy and sell the same stock over and over again in a matter of seconds ? For example if you buy a penny stock at 74 cents and in a matter of seconds goes up to 75 cents and you sell it, and then the stock goes back to 74 cents and you buy it again, then sell it for 75 or 76 cents within a few minutes and so an ! is it legal ? im playing a virtual stock exchange game > thanks !

7 Answers

  • Anonymous
    8 years ago
    Best Answer

    Yes but you will get classified as a pattern day trader. This is fine as long as you have sufficient capital in the account.

    Source(s): Investing since 1987
  • 8 years ago

    In theory YES you can, but to do this in reality and make a profit may be a little more difficult.

    In "playing" with penny stocks, you can never be assured that will get an execution at the price you want at the time you want.

    Buying at $0.74 and selling at $0.75 will not net you $0.01 per share since you will have to deduct the commission on the buy side and then again on the sell side.

    Don't forget all purchases must be paid in full before you can sell and if you do sell without making payment in full your account is restricted for 90 days or until payment is made and you can not use the proceeds of the sale to cover the purchase.

    If you buy and sell the same security on the same day four or more times in five business days you may be tagged as a pattern trader and if so you then will be required to maintain $25,000 minimum equity in your account at all times.

    Stay with virtual trading you can do well, but study a little harder before you enter the real world

    Source(s): from the street
  • 8 years ago

    Of coarse you can, day traders do it all the time. The only problem would be paying the commission on each buy and sell trade. If you have enough capital to make more than your brokers commission for profiting a penny per share then it would be a viable system.

    For example,

    Starting capital: 100

    Buy price: 0.75

    Shares: 133

    Sell price: 0.76

    Profit: 1.33

    Broker commission fee: 14.00 (buy @ 7.00 and sell @ 7.00)

    Loss: 12.67

  • Ryan M
    Lv 7
    8 years ago

    Yes it is LEGAL, however those would be considered "wash" transactions and would make taxes VERY difficult. You might also be classified as a day trader...making taxes even MORE difficult. But 100% legal.

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  • 8 years ago

    Yes, you can....and I'm sure your broker would love that since you pay him a commission on every trade.

  • Anonymous
    8 years ago

    yes wall street does it all the time computer controlled trading.

  • Sam
    Lv 7
    8 years ago

    Yes but losses would not be tax deductible.

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