Hi, I'm sorry for this newbie question. I admit I know very little to nothing of stocks. My spouse got a new job which allows employees to buy their stock at a 15% discount. They told him he could instantly sell the stock for full price and profit that 15%. He could just spend all of his check on the stock at 15% less, (I've head of a 3 day wait rule to sell) and then sell it and profit that 15%. Let's say we don't need to use his paycheck for anything else... and we continue to buy and sell and continue to profit 15%. That seems almost too easy. Is there any additional rules to this, anything we need to know before actually trying this?
The question would be if its more or less beneficial to make +15% today, or hold for a few months or years and make a lot more? If the stock is dropping, then its obviously better to get out, but if the company is solid and the long term looks good, keep it and building on it would be better right?
I understand that. But my question is still the same. For example, we have $6k in savings, spending the whole savings on his company's stock and then selling it (assuming no change in price) will gain us $900 on top of the $6k back. This seems like really easy money, too easy. That's why I asked the question I asked. Is there anything else we should know? (Besides the 3 day rule, and short term capital gains tax)
If every stock purchase is 15% below market value, and you can sell it after three days at a profit, then Im not seeing the risk here. I would be surprised if there is no restrictions placed on this, check with your broker and if he says its good, then enjoy your 15% every month!
Please check the other conditions. There must be other rules for ex. you can only put certain % of the money to buy these stocks. Also, sometimes you have to deduct money every month and can only buy in summer or winter. If you sell immediately, there will be more capital gain tax that you may have to pay so ultimately it will not be 15% profit. Please confirm the other conditions for the company
