[Arnt]

When you buy stock, you generally by it from a "market maker", which is a middleman. When you sell, you sell to a market maker. Their business is to let you buy and sell when you want instead of waiting for a buyer/seller to show up. The spread is their profit source.

[sesuximo]

Wouldn’t the price movement overwhelm the spread if you sell more than a few days after you buy? I guess if spreads were huge it would matter more

[Arnt]

The price movement does indeed overwhelm the spread. Half the time it goes up, half the time down.

[Maxatar]

>Half the time it goes up, half the time down.

This is not true and in fact when I hire quants or developers, I have to spend a surprising amount of time even teaching people with PhD's in statistics that the random nature of the stock market does not mean that it's a coin toss. It's surprising the number of people who should know better think trading is just about being right 51% of the time, or that typically stocks have a 50/50 chance of going up or down at any given moment...

What's closer to the truth is that stocks are actually quite predictable the overwhelming majority of the time, but a single mistake can end up costing you dearly. You can be right 95% of the time, and then lose everything you ever made in the remaining 5% of the time. A stock might go up 10 times in a row, and then on the 11th trial, it wipes out everything it made and then some.

[Arnt]

Sorry about that, I didn't mean exactly half or anything like that.

Still, I don't feel that it's wrong: Even on rereading, my phrasing seems to address GP's misunderstanding in an immediately accessible way. Which is better, a complicated answer that leads to proper understanding (if you understand it) or a simple answer that solves the acute misunderstanding (and leads to a smaller misunderstanding)? Both kinds of answer have merit IMO.