Learn How to Sell Penny Stocks Short – An Easy Way
When you've been trading a penny stock for a while, it's time to try out several different strategies. Instead of choosing the traditional "buy low to sell high" approach, you may want to choose to sell short stock. This is a middle-to-high-level strategy, and you should be very careful when executing this transaction. How to Work
First of all,. In the simplest terms, this strategy involves selling stocks, promising to buy back stocks in the future
As a trader, you bet that the problematic stock value will be sold in your stock and then back purchase. Profit will be the difference between the selling price and the price you buy back.
The purpose here is to profit between the two prices, and trading methods are slightly different. This time, the goal is to sell high and buy low – to reverse the common method of trading stocks, whether we talk about penny stocks or blue chips
At this point you might be wondering – "How I Can Sell Me Never buy a stock? Well, you have to think of it as borrowing stock from your broker. It's like being in debt until you close the position or sell the stock back to the agent.
As noted above, you have to be very careful in shorting your inventory stocks. Remember that penny stock trading is weak and volatile, and these two characteristics make them You will not be able to trade at the highest risk in one of the most risky investments in the market today. In addition, you can not discount because of certain trading venues (such as OTC-BB and Pink), your risk almost doubles,
Fence, you have traders who assert that if and when the right to do the activities offer the opportunity to profit again, the profit comes from the difference between high selling price and low purchase cost
On the other hand, you also have a strong warning for traders to short the stock because of unlimited potential, not great profits, but for huge losses. Think of this situation: you will sell $ 100 per share at $ 6.50 Dollar, which will rise to $ 85 per share in the following period. Since you are legally required to repurchase a penny stock, you need $ 85,000 to do so. That means you just lost a total of $ 84,350! Even in paper trading, This amount is still a considerable loss of your imagination of wealth