What is the ideal time and profit amount for someone to sell his or her shares that can cover brokerage fees and every other fees or charges without affecting your capital?
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What is the ideal time and profit amount for someone to sell his or her shares that can cover brokerage fees and every other fees or charges without affecting your capital?
There isn’t a single “ideal” time or profit figure that works for everyone, but there is a practical way to determine when selling makes sense so you don’t eat into your capital. 1) First, understand your cost structure Every time you sell shares, you typically incur: Brokerage fee SEC/CSCS chargesRead more
There isn’t a single “ideal” time or profit figure that works for everyone, but there is a practical way to determine when selling makes sense so you don’t eat into your capital.
See less1) First, understand your cost structure
Every time you sell shares, you typically incur:
Brokerage fee
SEC/CSCS charges
VAT and other minor statutory fees (in Nigeria)
These combined usually fall around 1.3% – 2.0% of the transaction value (it varies slightly by broker).
👉 That means if your profit is below this range, you’re either:
Breaking even, or
Losing part of your capital
2) Minimum “safe” profit threshold
To cover fees and still protect your capital, your gain should be:
At least 3% – 5% (bare minimum)
More realistically: 5% – 10%+
Why?
~2% goes to fees
The rest becomes your real profit
3) A simple rule you can apply
Think of it like this:
If gain < 3% → Don’t sell (fees will wipe it out)
If gain ≈ 5% → Only sell if you urgently need cash or risk is rising
If gain ≥ 10% → Reasonable zone to start taking profit
If gain ≥ 15–30% → Strong profit-taking zone (depends on strategy)
4) Timing is not just about profit %
This is where many investors get it wrong.
You don’t sell only because of profit—you sell based on:
a) Market condition
If the market is overheated → take profit earlier
If it’s still trending upward → you can hold longer
b) Company fundamentals
If the company is still strong → hold
If fundamentals weaken → sell even with small profit
c) Your strategy
Short-term trader → 5–15% gains are fine
Long-term investor → may wait for 20–100%+
5) Practical example
Let’s say:
You bought shares at ₦100
Now price = ₦105 (5% gain)
After fees (~2%):
Real profit ≈ 3% → very small
But if price = ₦115 (15% gain):
After fees → ~13% net profit → meaningful
6) A disciplined approach (what professionals do)
Instead of guessing, define:
Target profit: e.g. 15%
Stop-loss: e.g. -5%
Then stick to it.
Bottom line
There is no magic number, but a rational benchmark is:
Don’t sell below 5% gain.
Aim for 10%–20%+ to make selling worthwhile after fees.