Stock Prices Fluctuate
The price at which a stock may be purchased varies from day to day or, in most cases, as frequently as minute to minute. Stock prices regularly fluctuate based on a number of factors, many of which are outside the control of individual investors. Factors that may influence the price of a stock at any given moment include the overall health of the company that issued the stock, any recent news released about the company, actions taken by company executives and even rumors generated by Internet bloggers. To help investors purchase stock at a desirable price regardless of the typical fluctuations, some brokerage firms allow investors to issue a purchase order that is filled when the stock reaches a predetermined price.
Brokers Charge Commissions
In addition to the purchase price of the stock itself, investors much also pay a small fee to the broker who executes the stock trade. This fee, known as a commission, varies from brokerage firm to brokerage firm and depends largely on the services offered by the firm. Large, full-service brokers may charge commissions of up to $30 or more to execute a trade, while online, self-managed stockbrokers usually charge around $10 per trade. Some low-cost, limited-service stock trading platforms like Sharebuilder.com even offer commissions as low as $5 per trade, though these commissions are usually associated with reduced services and limited selections.
Stock Prices Plus Commission Equals Purchase Price
To determine the total cost for buying 100 shares of PepsiCo, potential investors must first assess the current value of the stock by visiting the "Research" department of the stock brokerage firm, or the official PepsiCo stock research page on the Pepsi website. After determining the current stock price and multiplying by 100 (the current stock price is for a single share only), the investor must also add the commission charged by the broker. For example, if the current value of the PepsiCo stock (stock ticker symbol: PEP) is $60, the cost of 100 shares would be $6,000. If the broker charges a commission of $9.99, the total purchase cost would be around $6,009.99. Of course, these amounts are for example purposes only. Both the actual stock price and commission fee may vary.
- FinanZine: Why Stock Prices Fluctuate
- Yahoo Finance. "Berkshire Hathaway Inc. (BRK-A) Historical Prices." Accessed July 26, 2020.
- Yahoo Finance. "Berkshire Hathaway Inc. (BRK-A)." Accessed July 26, 2020.
- Microsoft Investor Relations. "Frequently Asked Questions." Accessed July 26, 2020.
- Yahoo Finance. "Microsoft Corporation (MSFT)." Accessed July 26, 2020.
Keith Evans has been writing professionally since 1994 and now works from his office outside of Orlando. He has written for various print and online publications and wrote the book, "Appearances: The Art of Class." Evans holds a Bachelor of Arts in organizational communication from Rollins College and is pursuing a Master of Business Administration in strategic leadership from Andrew Jackson University.