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Questions from a stock market beginner

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Yep I've tried all upper case/lower case. Even went to their help which says the HIN is not case sensitive.

I think I know the problem. I have bought the shares on 31 August 2011, and the settlement date is 5 September 2011. That means the share registry has not updated my info yet? I thought it was only 2 days to settle the shares but I guess I was wrong.
 
I have a question regarding what takes precedence when carrying out orders - time (first come first served) or price?

In particular, if we have something like:

We have a company trading at $10, with 2 would-be sellers and 2 would-be buyers - all if which are buying and selling an identical amount of shares. The market is a few minutes before open and there are no trades yet.

First
Seller A puts in a sell order for $10
Buyer A puts in a buy order for $10

A minute later
Seller B puts in a sell order at $9
Buyer B puts in a buy order at $11


What happens?


Also, if we reverse the situation...

First
Seller B puts in a sell order at $9
Buyer B puts in a buy order at $11

A minute later
Seller A puts in a sell order for $10
Buyer A puts in a buy order for $10

What happens?


Thanks
 

If there are no other bidders then in A
B gets filled at $9
In B
A gets filled at $10
 
So, price always takes precedence and time only matters between people who put in an order at the same price - is that right?

Does that also mean that the lowest sell and highest buy orders get matched up first?
 
tech/a said:
If there are no other bidders then in A
B gets filled at $9
In B
A gets filled at $10
Click to expand...

That's wrong. In both scenarios everybody gets matched up at $10 with no remaining volume.

Starcraftmazter said:
So, price always takes precedence and time only matters between people who put in an order at the same price - is that right?

Does that also mean that the lowest sell and highest buy orders get matched up first?
Click to expand...

Yes price always take precedence and time only matter when price is the same. If you want your order filled you can put in as high/low a price as needed, but your volume might move the match price.
 

Yeh your right.
Same average
 
Just 2 quick questions:

I've researched ex dividend dates and record date. Some sites say you have to hold the shares till the record date to be entitled to the dividend.

Other sites say you can sell shares after the ex-div date but before record date and still be entitled to the dividend.

Which one is true?

Also, regarding the franking credit entitlements, do I have to own the shares for 45 days to be entitled to franking credits? I thought this was only IF you had more than 5000 dollars of franking credits, then this rule applies?

Thanks.
 
Not sure if this has been asked before, and wasn't sure of appropriate search terms. Wondering if anyone can point me to some useful resources (books or online) the describes the whole franking credits thing.

I read a book published around '93 the other day (The Art of Investment), and it kind of explained it but I still don't 100% get it. The way the ASX online course made even less sense to me.

If it's 100% franked, it just means you don't have to pay tax on the dividend received right? Similarly, if its 70% franked, you have to pay tax yourself on the extra 30%?

Also, on asx prices and research. i.e. ANZ: http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&allinfo=&asxCode=anz#dividends

it says 100% franked in the % franked column, and in the further information column: 64C FRANKED @ 30% D.R.P. & B.O.P.

In the case of being a part of DRP, means you have to pay tax on the 70% extra?

Thanks for any info.
 

You only need to hold past ex-date.

The 45-day rule only applies if you claim more than $5k of franking credits.


Your franking credit is also known as franking coupon... now imagine an invisible coupon attached to your dividend cheque. This amount is tax already paid by the company. When you detach that 'coupon' you can redeem it at the tax office to pay your tax, although you also need to include the value of that coupon in your taxable income.

So...say with ANZ paying 63c dividend franked at 100%. Which means there is an invisible coupon of 27c franking credit.

Your taxable income is 63c + 27c = 90c.
If your marginal tax rate happens to be 30%. Your tax liability is 30% * 90c = 27c.
Now you can detach that invisible 27c coupon and pay the tax office. So your net tax is 0c. This will only be the case as your personal tax rate of 30% = company tax rate.

Work it out for yourself what happens if your tax rate is 19% or 45%. The calculation is the same but in one case you have a net credit with the tax office (which they pay you in cash) and in the other, you have to pay additional tax.

The operation of a DRP doesn't change your tax or how franking credits work.
 
Hello,

would someone be able to explain to me what tax loss selling is and what effects it has (on stock prices as well)?
 

Oh ok cool. Thanks. That makes a bit more sense. How do you calculate that the coupon on the 63 cents is equal to 27 cents?
 
MovieManiac said:
Oh ok cool. Thanks. That makes a bit more sense. How do you calculate that the coupon on the 63 cents is equal to 27 cents?
Click to expand...

Corporate tax rate = 30%.

Gross up dividend = 63c / 0.7 = 90c

Franking credit = gross up dividend x corporate tax rate = 27c.
 
bears said:
Hello,

would someone be able to explain to me what tax loss selling is and what effects it has (on stock prices as well)?
Click to expand...

Sometimes when nearing the end of financial year investors will sell shares that are at a loss in order to offset capital gains from other investments (capital losses on shares can be used to offset capital gains on shares).

In effect they reduce their tax bill. In certain cases they will sell the shares at a loss just prior to the end of financial year and buy them back shortly after at roughly the same price (if possible). That way they get an immediate reduction to their capital gains tax bill and still hold the same stock for roughly the same price. Note that this practice is called 'white washing' and is punishable by the ATO.

It's effect on stock prices is that it can dampen prices in June as higher than normal volume of selling occurs - but this is not a given. From memory there was no significant statistical correlation between the two.
 
Re: Queries from a newbie


How good is this. He's 18 and already been learning and paper trading for 3 years, and now doing a law degree. This kid is going to be very successful. I wish I knew what trading was at his age!!

Well done mate. Much success to you
 
Hi,

I'm planning to start investing in shares shortly, I'm quite new and trying to learn as much as I can. I'm also trying to get a gig at a prop shop.

I was wondering if some of you could recommend some magazine subscriptions, newspapers and websites, that I may find useful and help me get started. Also wondering which websites people use for news and updates on the market.

Thanks
 

jonafern.
Everything you asked for is probably on this forum already.
Go to Forum Jump, click the menu, and happy hunting.
Its all there.
If you want a jump start and would like to trade the wyckoff method go to::
www.readTheTicker.com and there is a list of books.
After 81 years it is thought this is a good method.
joea p.s. that will keep you busy full time for 2 weeks with no sleep.
 

Fair Go! Jonafern, here's the heads up! on a few sites I know of to help you get started. All the best on your trading journey. My best tip would be to keep digging around the internet. There's a lot of good educational stuff out there that shouldn't cost you a cent.

http://www.tradingroom.com.au/apps/index.ac
http://www.news.com.au/
http://www.incrediblecharts.com/sitemap.php?cluster=16
http://informe.com/go/?domain=stockbrokers.com
 
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