Forum Archive Index - July 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Jim,

>
>
>Snoopy,  where does this 15c. per share brokerage figure come from?
>Who would pay that amount? What have I missed?
> 
> 


Sorry my explanation may have been a bit obscure.  There are two 
transactions involved, and the associated brokerages, are calculated 
on buying and selling Telecom shares.  The amount of this 
brokerage may be calculated by at least two methods:

Long Calculation Method:
------------------------

Buy at $4.60.
Brokerage is 1.5% or 6.9c per share.

Sell at $5.40
Brokerage is 1.5% or 8.1c per share.

Total brokerage is 6.9c + 8.1c = 15c per share.


Short Calculation Method:
------------------------

We observe the average price of shares traded = ($4.60+ 
$5.40)/2 = $5 
The shares must be both bought and sold, so a double 
charge of brokerage ( 2x 1.5%= 3% ) will be incurred.  

So, we can work out the total brokerage payable all in one 
calculation like this:

Total Brokerage = 0.03 x $5.00 = 15c per share


I hope my calculation now makes sense to you.

SNOOPY






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