The risk of short is higher than that of long
$Sea (SE.US)$ Today's notes.![]()
The premise that short selling can be profitable is that you accurately predict the short-term downward trend of short stocks. If you make a wrong prediction, you sell stocks at a low price and have to buy them back at a high price. Here, the risk of short selling is greater than that of doing more.
The premise that short selling can be profitable is that you accurately predict the short-term downward trend of short stocks. If you make a wrong prediction, you sell stocks at a low price and have to buy them back at a high price. Here, the risk of short selling is greater than that of doing more.
For example, if I buy 100 shares when a shares are $10, my biggest risk is that a falls to 0. My biggest loss is 100%, and 100 shares are $1000. But if I short 100 shares when the price of a's stock is $10, when it rises to $20, the share price will increase by 100%, and my loss is $1000. If it goes up to $30 per share, the increase will be 200%. At this time, my loss will become $2000. If it continues to rise, the loss will be even greater.
Therefore, long is equivalent to locking the maximum loss of 100%, while short may have unlimited losses.![]()
Whether long or short, it is necessary to stop loss in time.
Whether long or short, it is necessary to stop loss in time.
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Investment Tryhard : Just buy on dip. Risk reward ratio is really good at current price level
Ixy The Cat : Short selling is one of several trading strategies that if used well can be rewarding despite the risks. In fact I made 6K within 2 hours yesterday shorting the $Sea (SE.US)$ because it was pretty obvious the stock price was due to a big correction.
icezzz Ixy The Cat : Today will continue drop?
Ixy The Cat icezzz : Right now the support level for is not clear imo current price is still too high... got trading opportunity but not a stock to hold
whqqq OP Ixy The Cat : great job
whqqq OP Investment Tryhard :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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zdqhj : Guess it hasn't been long since you've been in the market?