How to profit when stock price is falling?

Home | Links | Contact Us | Bookmark

Financial Forum Search :

Financial Forum

Investing

Finance Discussion Forum

Advertising & Marketing Corporations Credit Insurance Investing Personal Finance Renting & Real Estate Small Business Taxes Business & Finance

Is it better to buy a house cash(If you have the cash) or finance it? What would you do?

...

Would you go to wal mart to get a girlfriend or boyfriend?

you know that girlfriends and boyfriends are 30% cheaper at wal mart over k ...

Why the Share Market has fallen down so Drastically?

...

Where can i invest 20,000$ dollars ?

...

If you had $10,000 and only the choice of 1 stock to buy......?

Which one would you choose? Myself personally, I would probabily pick someone like General Electric or IBM... which one would you choose?...

I'm 19 and have saved up $5000.and i want to invest it?

i'm a student and i want to make some extra money..what do u think is the best way to invest $5000..Thank you for whoever ...

What's a stock that is going up in price?

...

What will the price of gold be in 2 months time?

...

Who is the best in Internet stock trading?

...

Is it better to purchase low priced shares than high priced ones ?

If one selects low priced shares to purchase, he gets more no. of shares , also, more divident. Is it advisable to do so ?...

Is heating and air conditioning a good business to start?

...

If you had over a million dollars..what would you do?

...

What is your openion what will be the Gold price after 6 months ?

I am planning to buy Gold in bulk for investment. As we have seen Godl prices have hiked drasticly in recent past....

Whats your view about gold price will go up or down?

...

Have you heard about the total collapse of the stock market scheduled for this October?

The rumor seems to be rooted in fact. Sounds just like the"'current regime", doesn't it?! Now that the price of gas has dipped and we are licking our wounds ... BAM(!) - there ...

Can one make a living trading stocks ???

I'm looking at swing trading and start up with $25,000 ....

Suggest some good websites, books to get information about the sharemarket ,dealing in shares & mutual funds?

...

I am 17 years old and wanna invest in stocks. I dont know much. Help?

I am 17 years old and I am really interested in getting into stocks and the market. I know very little but would love to start learning and investing really soon! Where should I start?

T...

Â£10,000...?

So you have 10k to invest and want to open a small business...what do you do?
Additional Details
Just to clarify i'm just wondering what you guys would do, more than looking for ...

How to I buy stocks, and do I need a stock broker?

...

teocs01

How to profit when stock price is falling?

Does it mean that I got to "sell" the stock 1st then "buy" when the price drop?

robertochahin

Yeap. Its called short selling. You can also use buy put options which go up in price when the underlying stock goes down. Read about it first befor you do it.

pdonlevy

You are referring to short selling. This requires a fairly sophisticated understanding of markets and stocks.
The risk with short selling is that there is no limit to the amount of money you can lose. It is possible to lose 2 or 3 times more than your original investment. For this reason, most brokers require an account to be approved for margin before short selling is allowed.

Hari Priya J

dont sell ur current stocks.buy the stocks which has occured loss.
that will gain u profit

Iris R

It all depends at what price you bought your stock. If it is below for what you bought it for and the company normally has a good track record hold on to it. You would benefit more by buying new stock now and ride it out. The stock market is for the long run. If you have good diversity in stocks you still should come out OK overall.

Scott

I reccommend selling, you should see a stock advisor though.

Common Sense

Shorting (stocks) is one way. It's a dangerous game for the novice. Buying "proshares ultra short" ETF's is also another way. Also dangerous for the novice (especially because it's leveraged at 2X your investment).

I suggest you really "learn" this stuff before doing. Not having the right stops and "whipsaw" will kill you!

BTW: Buying stocks on the way down is considered an amateur move. When do you catch a falling knife?

â–²ÃŸÃ»Ð†Ð†Ñ• vÅŸ ÃŸÃ¨ÄÅ—Ñ•â–¼

short selling.

but be very careful

chrome

sell stocks you don't own (selling short) when the stock is going to fall

when that happens you buy stock back to cover your short sell.

you gain the price difference of the fall.

just the mirror image of buying low and selling high

witz1960

if your bet is that the direction for a stock is heading down there are 3 options. Selling short, buy Put Options or sell Call Options.

Selling short is likely going to be done in your margin account. You are selling borrowed shares at today's market price and then later buying them at a future market price - hopefully much lower. The big risk is that if the market goes up your loss potential is unlimited because you might have to buy those shares at an unimagineably high price.

Selling Call options will probably require additional approval from your broker. This is an income strategy with a limited upside compared the risk of unlimited loss if the stock goes UP. You collect a premium up front but agree to deliver 100 shares for each contract, which you will have to do if the stock goes up.

The final idea is Buying Put options. First off.. your loss is limited to the premium you pay up front. With the Put option strategy you are essentially doing the same thing as selling short except you get to leverage many more shares while you don't have to worry about additional losses if the stock goes up.

Prophet 1102

Yes - limit your losses - then buy back in when they start to rebound.

Enter Your Message or Comment

User Name:
User Email:
Post a comment: