Lloyds Banking Group Shares

Summary: How I bought my first shares...

I received some cash last month for my birthday and on the spur of the moment, I decided to try make some money off it. My mate who is training to be an accountant told me that the shares of banks were on the low side. I kept my eye out for dips in the share price.

In the mean time, I did some research on how to buy shares. Since my investment is of low value, I decided to manage the trading myself. Having read some introductory stuff on good old MoneySavingExpert.com about "Execution only stockbrokers", I scavenged the internet for the cheapest execution only share dealing providers.

According to my mate, iii.co.uk is his top choice because it provides good market information as well as cheap transaction fee. In fact on their share dealing web page they provided a comparison table which is more up to date than the one on MSE.

I was quite tempted by £10 per trade until I found x-o.co.uk offering £5.95 per trade! Naturally, I was a bit skeptical at first, as our good friends at MSE have discussed its legitimacy, I decided to give x-o a try.

My x-o account was opened within an hour or so after my signing up. I transferred some money into the account, and... panicked for 40 minutes whilst constantly refreshing... The money finally went in as I prepared to express my rage online... Phew...

On the glorious day of 11 Feb 2010. Lloyds Banking Group (LLOY.L) was one of the biggest FTSE100 losers of the day. So I held my breath when the shares dropped below the 47p mark and bought my first shares through x-o. The offer price was a little higher than the Yahoo!Finance ticker, and I was charged stamp duty on the side. In short, the interface was easy to use and I promptly received a Contract Note from x-o.

Here's the formula I am using to see when to sell my shares:

(1.05*share purchase price) + (11.9/number of shares purchased)

When I plug in my numbers, my calculations come to 0.56. If I were to sell my shares when the share price exceeds the 55p per share benchmark, I will have made a nice little profit. Naturally the greater the sell price, the more profitable this is. Lastly, as a reminder to myself - red marks the spot!