What is the outcome of buying and instantly selling 100 shares of Apple stock at 101.50?

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Multiple Choice

What is the outcome of buying and instantly selling 100 shares of Apple stock at 101.50?

Explanation:
Buying and selling the same amount of stock right away creates a round-trip. Even if the price you see is the same for both trades, you still pay costs—the bid-ask spread and any commissions. Those costs reduce your proceeds on the sale relative to the purchase. If the round-trip cost is about $0.10 per share, then for 100 shares you lose roughly $10. So the sequence ends with a small loss, not a profit, because the costs of trading outweigh any tiny price equivalence. In other words, profits must exceed the total round-trip costs to be realized.

Buying and selling the same amount of stock right away creates a round-trip. Even if the price you see is the same for both trades, you still pay costs—the bid-ask spread and any commissions. Those costs reduce your proceeds on the sale relative to the purchase. If the round-trip cost is about $0.10 per share, then for 100 shares you lose roughly $10. So the sequence ends with a small loss, not a profit, because the costs of trading outweigh any tiny price equivalence. In other words, profits must exceed the total round-trip costs to be realized.

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