Why should you choose short-selling?

What is Short Selling?

Short-selling happens when one sells a resource or a service that you do not own with the optimism that its worth will dwindle and benefit from the sale. It is also referred to as shorting.

For a short sale to occur, the lender acquires the stock through their company from the individual whom it belongs to. The lender then markets the stock, keeping cash proceeds.

The short-seller then relies on the price of the stock fluctuating over time, yielding an opportunity to acquire back the share. The remaining money is considered a profit. 

With the accomplishment of Short Selling through a middle person, this entire process has drawbacks. It is as a result of the difficulty involved when searching for a reputable one who is inclined to give you shares to the market.

When does short-selling make sense?

Short-selling is not as familiar as owning stocks. However, very few investors practice short-selling. A significant reason for this is general market trends. Many investors possess funds, commodities, and other investments that they wish to increase in value.

Recently with the rise of the stock market and glimpses of down moments, long-term investors have found it better to own stocks than short-selling the stock market.

Short Selling is more sophisticated than just buying a stock. It can provide you a chance to make money when others expect their assets to reduce.

The risks of Short-selling

One can make a profit from short-selling by making the right call, but there are chances of incurring losses. After buying a stock, the most significant loss you can suffer is what you pay for it. Incase stocks fall, then you will experience full damage, but you can’t incur more loss than that. In contradiction, there is no limit to the profit you can enjoy if the stock escalates.

Short-selling merits

  • Short Selling provides traders with a connection to instruments that they would not be capable of trading. One can gain from a reduction of an instrument’s price without possessing it.
  • Several traders benefit when stock markets fluctuate, but some suffer greatly.
  • Short Selling provides the capacity to add essential risk adaptive returns.
  • Short-selling allows the trader to use little capital since he only takes what he can handle.
  • There is the option of hedging, where this acts up as a safety net for traders and reduces the risks of suffering significant losses.

Disadvantage of short-selling

The other side of this coin is that in case there is a difference in the predictions made then, the trader looks at a loss of more than 100%

Conclusion

With technology, the business world has developed. It has increased profitability in the short-selling world. With the right tactics and the best trading platform, trading becomes all about earnings. Every trader should know that there are at times when you incur losses, and at times you get profits. So, get into short-selling and have yourself the best trading experience.

*** BEST STOCK NEWSLETTER of 2020 ALERT ***

Updated October 15, 2020

At WallStreetSurvivor, we subscribe to dozens stock recommendation and advisory newsletters. There is ONE newsletter that is constantly outperforming all of the others--The Motley Fool Stock Advisor.

TWO of Motley Fool's 2020 Stock Picks Have Already Quadrupled, ONE has tripled, and another TWO Have Already Doubled in just 9 months of of 2020!

We have been tracking ALL of the Motley Fool stock picks since January 2016. That's 5 years and 120 stock picks. As of Friday, October 23, 2020 the Motley Fool's January 2 stock pick (TSLA) is up 388%, their March 19th pick (ZM) is up 313% in just 7 months, and another two have more than doubled. In addition, 9 of their 2019, 9 of their 2018, 10 of their 2017, 9 of their 2016 and 14 of their 2016 picks have also doubled. Most impressively, over the last 5 years that we have been tracking every recommendation, their average stock pick is up 169%. That beats the SP500 by an average of 124%. And that's even accounting for all of this COVID mess that has wreaked havoc on most stocks. BUT, the Fool has done so well because they have quickly identified stocks this year that will perform well in the post-COVID world. THAT is how the Fool consistently does so well--they adapt and constantly pick stocks before everyone else realizes the opportunities.

  • PINS -- October 1, 2020 pick is already up 19%
  • FVRR-- September 3, 2020 pick is already up 36%
  • CrowdStrike (CRWD) -- June 4, 2020 pick is already up 41%
  • Shopify (SHOP) – April 2, 2020 pick and it is already up 196%
  • Zoom Video (ZM) – March 19, 2020 pick and it is already up 313%
  • DexCom (DXCM) picked Feb 20, 2020 right before the market crashed and it is still up 35%
  • Tesla (TSLA) picked January 2, 2020 before the crash and it is up 388%
  • HubSpot (HUBS) picked December 5, 2019 and it is up 105%
  • Netflix (NFLX) picked November 21, 2019 and it is up 56%
  • Trade Desk (TTD) picked November 11, 2019 and up 221%
  • Zoom Video originally picked Oct 3 and it is up 565%
  • SolarEdge (SEDG) picked September 19, 2019 and it is up 216%

Now no one can guarantee that their next picks will be as strong, but our 5 years of experience has been super-profitable. The important thing about the Fool stock picks is you have to buy them the day they are recommended because they usually pop 5-10% in the first 72 hours after the release their recommendation. So to maximize your returns, you MUST buy them the day they are released. During this POST-COVID market we are in, they have been excellent at picking stocks that will excel. The average return of their 2020 stock picks is +68% which beats the market's return of only 12%. You sure don’t want to risk missing out on their next pick.

Normally the Fool service is priced at $199 per year but they are currently offering a NEW SUBSCRIBER DISCOUNT that allows you to get theiir next 24 stock picks for just $99/year. HERE is the LINK to visit their New Subscriber Discount page.

CLICK HERE to get access to all The Motley Fool’s Stock Picks and their next 12 months of picks for just $99 per Year! 



GET UP TO $1,000 IN FREE STOCK

WHEN YOU OPEN A ROBINHOOD BROKERAGE ACCOUNT

Robinhood was the first brokerage site to NOT charge commissions when they opened in 2013. They just past 10,000,000 accounts and to celebrate they are offering up to $1,000 in free stock when you open a new account.

Here’s the details: You must click on a special promo link to open your new Robinhood account. Then when you fund your account with at least $10, you will receive one stock valued between $5 and $500. Then, you will get a link to share with your friends. Every time one of your friends opens an account, you will receive another free stock valued between $5 and $500. Click here to learn more about this Special Robinhood offer.

Claim your free stock NOW (before it’s too late)



Leave a Reply

Your email address will not be published. Required fields are marked *