Direct stock purchase plans using batch trades
DOI:
https://doi.org/10.61190/fsr.v21i3.4675Keywords:
Investing, Batch trades, Dollar-cost-averaging, Direct stock purchase plansAbstract
Direct stock purchase plans offer low trading costs. However, some plans batch orders and execute trades once per week. If prices spike during batch buying, or plummet during batch selling, low trading costs may be offset by unfavorable prices. This study examines daily high and low stock prices for companies whose plans require batch trades once per week. Results suggest that not a single company has higher or lower stock prices on any trade day of the week. Therefore, investors can use these plans without concern that they will buy high and sell low.
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