I recently purchased a home to live in while finishing up my degree. The home has a 3.5 acre lot, and the price was very affordable for where I live. I started to think about selling my shares of stock, just like I did when I bought it. I did a bit of searching and found that the price that I paid for the stock was 3.75% of the value of my stock when I bought it.
This is a common practice. Many people sell their stock stock stock, and they have no idea this is happening, because they haven’t put anything into it. If you want to sell a stock, you need to put some money into it, and that’s generally how everyone learns about it.
What is often overlooked, however, is that when you sell your stock, you lose a lot of money on your initial investment of the stock. But this is exactly why most people don’t sell their stocks. They think they’ll lose the money, but when it comes time to actually make the money, they still haven’t done anything to it, so they think they’ll lose even more.
People tend to forget that when the stock value jumps, the loss on selling is also higher. So for every 1,000 shares you sold, your original investment of 133/4 is worth $133. However, the actual loss per share when you sell is less than the initial investment when you buy. The reason why this happens is that when you first buy the stock, you are already invested at $133/4, so you know this is an extremely risky investment.
If you did sell a stock you bought at 133/4, you are still going to lose at least 100% of the original investment. What we are talking about here is the concept of “premium”. A premium is just a percentage of the original investment. When you sell a stock, the premium is calculated as the difference between the current share price and the original investment, divided by the original investment.
In order to calculate the premium, we first buy up a set of 50 shares of a company at 133/4. We then sell those 50 shares at a current price of 12. At the time of the original investment, that original investment was 1334. So if we sell the 50 shares at 1334. We’re now at 1223 and we’re losing $5.33 (50% of 1334).
What makes the premium calculation so tricky is that there is no formula for how to calculate the premium. So you need to do it by hand. In the example given above, we first bought 1334 out of the original investment at 1334. Since we sold the 50 shares at 12, we end up at 1223. That’s the premium. Now we need to divide that 1223 by the 1334 we sold to get the amount we have to pay to get rid of this stock.
The premium calculation is complicated because it involves two factors: the original investment and the value of the stock. For example, if we buy 100 shares of stock and sell them at 100, we actually end up with 100. So we’ve actually paid for the stock at 100.
To calculate the premium, we can use a stock’s price at the time we sold the stock, not the price we bought the stock. So if we sold the stock at 133, but we bought it at 25, we end up with 25. That’s the amount we have to pay to get rid of the stock before we pay the premium.
So if we paid 133 for the stock and we sold the stock at 25, we would pay a premium of 25. We get a 75% discount.
