Showing posts with the label short-selling-basics


SHORT SELLING AND LEVERAGE In a certain sense, day trading isn’t risky at all. Day traders close out their  positions overnight to minimize the possibility of something going wrong  while the trader isn’t paying attention. Each trade is based on finding a small  price change in the market over a short period of time, so it’s unlikely that  anything is going to change dramatically. But here’s the thing: Trading this  way leads to small returns. It’s hard to justify trading full time if you aren’t  making a lot of money when you do it, no matter how low your risk is. And, of course, some days, there aren’t many good trades to make. You can  be looking for securities to go up, and they aren’t. Zero trades lead to zero  risk, and zero return. That’s why savvy traders think about other ways to make money on their  trades, even if it involves taking on more risk. It’s that risk that generates the  return that many traders crave. In this chapter, I cover two techniques for