When Can You Sell Stocks Without Penalty?

Sell your stocks at any time if the current price is acceptable.

If you own stocks in a brokerage account, the costs to sell those shares are the same for any time period after you buy the shares. Shares of stock are marketable securities and the shares of most companies trade continuously when the stock markets are open. Stock market hours are 9:30 a.m. until 4 p.m. eastern time, Monday through Friday.

Stock Gains or Losses

The price per share you receive when selling stock can be higher or lower than the price you paid to buy the shares. The goal of buying stocks is to have the share price increase from the purchase price. However, share prices can also decline. During the 2008 to 2009 stock bear market, the average stock lost 50 percent of its value. Share prices can change from moment to moment when the market is open. The current price can be provided by your broker over the telephone from the quote or trade screen if you have an online brokerage account.

Brokerage Commissions

Broker commissions are a major cost of selling stock shares. Most brokerage firms charge the same amount to buy shares and again to sell. The commission rate for discount brokers is usually a flat fee, no matter how many shares or the price of the stock that is sold. Online discount brokerage fees are typically $8 to $10 to sell shares. If you need phone assistance to sell shares the commission will go up to $45 or more, as of 2011. Full-service brokers do not publish commission rates and can be negotiated depending on the level of trading.

Bid-ask Prices

Stock share prices will always be quoted with a bid price and an ask price. The ask price is the price you pay and the bid price is what you receive if you place a market order to sell stock. The bid-ask spread is the cost of selling stock, especially if you sell shares soon after buying them. For actively traded stocks the bid-ask spread will be one or two cents. The shares of thinly traded stocks can see the spread widen to a dollar or more.

Short-term Trading vs. Investing

Although you can sell your stock shares at any time, the costs of selling stock have a lesser effect on the long-term investor who has watched the share prices increase significantly in value. The net cost of selling 100 shares is approximately 10 cents per share. If 1,000 shares are sold, the cost drops to a few cents per share. Traders who rapidly buy and sell shares must overcome these costs before earning a profit. Costs are incurred on the buying side also, so a trader buying and selling 100-share blocks needs the price to increase by 20 cents or more before a trade enters a profitable position.

References

• Investmentforbeginners.com: Typical Stock Market Transaction Costs
• Optionistics: Cost of Trading Stocks
• TD Ameritrade: Pricing