How can I profit from falling stocks?
827846
The most Basic,Direct way To Profit from Falling Stocks requires what is called a SHORT SELL Position.\n\nA SHORT is ...Selling Stock that You Do Not Own.\nThe mechanism to accomplish that is to BORROW\nThat stock,,,and then Sell it.\n\nThat act puts 2 Things in Your Account:\n#1>The Cash Proceeds from the SALE\n#2>The DEBT of the stock that You Borrowed\n\nWhen the Stock Drops in price,,You BUY the stock to replace\nthe stock You Borrowed.\n*Your "Debt" is cleared by virtue of Returning the Borrowed stock\n*Your Profit is the Difference between the HIGH Price you Short-Sold it,,,and the Lower Price at which you Bought the Replacement stock.\n\nThat seems odd to many people.\nAmazing the number of active stock traders who dont seem to grasp the concept.\n\nA simple analogy:\nYou need a Dozen Eggs,but dont have them.\nSuppose Eggs are selling for $1/Dozen,,,and that You Know they will be On Sale Next Week for $.70/Dozen.\n\nSo You BORROW the Dozen from Me...with a promise to replace them in the future.\nYou give me an "I-O-U 1 Dozen Eggs"\nOk,,Next Week,,You go buy a Dozen at $.70 and replace the Dozen you Owe me.\nWe're square,,You're debt is squared,,,\nand You have $.30 More in your pocket than if you'd bought the Eggs at the Current Price of $1 .\n\nMakes No Difference to me what You paid,,,\nI have my Dozen of eggs back.\n\nTo Sell Short requires a certain type of Brokerage Account,,called a Margin Account.\nIt is basically a "Line of Credit" type of account which accomodates You incurring the "Debt" of BORROWING STOCK to SELL.\nYou REPAY the debt by Replacing the Borrowed STOCK.\n\nIf You can BUY the replacement stock at a LOWER Price than you Sold at----You Profit.\n\nIf the Stock price happens to RISE,,,you'll have to Buy replacement stock at a Higher price,,,,,and You'd LOSE money on the transaction.\n\nShort Selling still obeys the premise of "BUY LOW>Sell High" in order to PROFIT.\nThe difference is a matter of "Pay me Now,vs Pay me Later"\n\n.....................................................\nA ShortSell position or Option Put would profit from a decline in Share Price.\n\nDetermining a particular stock's relatives/comparables will often reveal Weak stocks,or Overbought ones in the group.\nThose will usually be the most likely suspects in the sector.\n\nYou can also study Historicals of a Individual stock & of it's sector,,,and discern any seasonal or cyclical aspects.\nFrom that You can anticipate those tradiditional corrections(declines in price)\n\nAs well  as creating as Leader/Laggard list of the Bunch.\n\nIf the motives for a Stock's fall are based upon News/Events etc,,\nConsider whether the Impact is Specific to that company or generic-to it's  industry or business niche.\n\nThere's also usually some Contrary Implications.\n\nExample-A,,"If Oil Falls,,Holiday Retail Rises"--\nthe premise is that event is so influential on general economy AND people's household budget---Falling Oil Boosts both their Consumer confidence And their immediate spending power.\n\nExample-B,,"If Stock A Drops on Individual Specific problems,,\nThen it's Direct Competitor Stock B becomes more an attractive position to maintain exposure to that particular Biz Niche/Industry\n\nExample-C,,A Stock can easily be Oversold--Fall TOO far due to a specific cause.\nMkt's famous for Overreacting.\nThe Steep Sudden Drop Might be a BUYING BARGAIN PRICE.\nIt Could be Fundamentally Oversold.\nAnd it also Could be TECHNICALLY Oversold,,,,and give a strong signal of a releif bounce--a rebound in Price-- being due.\n\nVery little happens in a vacuum--\nAny time A stock,,or a Group of Stocks,,or an Industry Sector,,or even Broad Mkt Falls(or rises)...it triggers a ripple thru a wide range of interrelated  issues.\n\nYou can make $$$:\n*On the specific Stock's Fall\n*On it's releif rally/bounce\n*On it's
460909
They're all good to watch. Not many worth buying, unless you like being manipulated.\n\nAnyone with a million dollars or so can pump and dump these stocks and send their prices soaring, so that you get in, then plunging, so that you lose everything very fast. \n\nOr the average guy, you for example, can start a new company building furniture. It's decent stuff and you have it built in the Caymans so your cost is cheap and you make money. Take the company public and issue stock with an IPO. \n\nWhen the stock soars on the IPO, sell your shares and start a subsidiary, and put all your money into that new company making T-shirts. Of course, the furniture company's stock fell considerably, because you took all of the cash out. \n\nWhen you make money on T-shirts, go public, and when the IPO soars, sell your shares, and buy back the furniture stock at depressed levels. Of course, the T-shirt stock goes down the tubes, because you pulled the cash out, but hey, you're making a killing onthe stock.\n\nThis is legal manipulation. You've been warned. Penny stocks are very risky for a reason, or lots of reasons. Buy something with known value, that's been around awhile, and will continue to be around. So what if you can't buy as many shares? You can still double your money, and reduce your risk in half, by investing in the future of a stable company not ran or manipulated by shysters.
197335
Invest in the stock market, if you do it carefully you can make a good deal of money pretty fast, and you don't have to go to work!
453324
BOOK LOSS AND INVEST IN QUALITY STOCKS WHICH IS FUNDAMENTALLY GOOD AND IN LOW PRICED STOCKS LIKE VIJAYA BANK,NEYVELI LIGNITE  ETC
456214
I'll give you what you need to know to make smart buys. The best way to go is a mutual fund. There are many companies who do this just find one and put money into it. Then you set what you want to invest in...what companies that is. The best way to go for sure profit is large corporations...don't worry about which ones...that's what the mutual fund is for...the accountant deals in what. He makes a small commission so you doing well is in his best interest. At the great depression...the average was still 3% gains. Today it's realistically 10%. Small corporations have a much higher percentage of increase in value because they start so low. Putting a quarter to a third of your mutual fund towards smaller companies wouldnt be a bad idea. If you have any other questions just email me...nbrikha@yahoo.com
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Buy a diversified series of mutual funds. Individual stocks are just way too risky in most cases, especially for novice investors, even if they look like a sure thing.  How are Enron and Worldcom doing right now?\n\nMake sure you hit all the assets classes, like Large cap stocks, small/mid cap stocks, international stocks, emerging markets stocks, government debt, corporate debt, hi-yield debt, foreign debt, emerging markets debt, real estate, commodities, and precious metals. That's 12 categories right there, so let's say you get started with with $1200, you're talking about $100 each. \n\nThen sit back and rebalance each year, back to your original percentages. This is called asset allocation. The thinking being, what's BEEN hot is more than likely not going to STAY hot. All markets, after all, are cyclical.  This is why people who invest their 401(k) by just putting in whatever's had the most recent best numbers never get anywhere--they're investig in something that DID will and IS probably NOT doing well.\n\nThis sort of portfolio should average 8-12% per year, so just split the difference and say 10%. Will it do 10% EVERY year? Of course not. I'd be surprised if it ever did EXACTLY 10%. That's an annual average. With that average, your money should double roughly every 7 years. \nSo, in 7 years you should have about $2,000\nin 14 years you should have about $4,000\nin 21 years you should have about $8,000\nin 28 years you should have about $16,000\nin 35 years you should have about $32,000\nin 42 years you should have about $64,000\nin 49 years you should have about $128,000\nin 56 years you should have about $256,000\nin 63 years you should have about $512,000\nin 70 years you should have about $1,024,000!\n\nOf course, if you keep adding money in, say $100 a month, you'll become a millionaire MUCH sooner. The key is discipline, and sticking in when markets are up OR down. Don't try to time the market--you'll NEVER get it right.\n\nHere's a handy formula:\n\n$100/month x 12% retutn x 20 years = $100,000.  \n\nSo if you invest $300 a month, you can expect to have $300,000 or so in 20 years, depending on what return you get.  And remember, even if you stop there, that money itself will double again in 7-10 years, depending.  Then double again.  Then double again.  You get the idea.\n\nIn short, you can make a HELL of a lot of money, with a small output on your part, if you do it right, and are patient.\n\nOh, and if you qualify, and do this all in a Roth IRA? Then every penny will be 100% TAX-FREE. That's a deal that's too good to pass up. That's why I tell all my under-30 clients--if you make under $90,000, and therefore qualify to do a Roth, you'd be a fool not to. Just having the power of youth (and therefore time) on your side is such an advantage, to squander it would be such a waste!\n\nHope this helps!\n--J.\n\nP.S. The previous answerer's advice about contacting Edward Jones is gold.  I would go to their website at www.edwardjones.com, enter your zip code, and find the closest office to you.  Chances are there's one within 10 miles.  They have 10,000 office in the US, UK, and Canada.  And they will take care of you right if you decide you don't want to go it alone.
421970
buying a put is fine however if stock stays flat, put will lose what is known as time value.  Put expires, which isn't to your advantage when you are thinking stock is going down.  You can hold short for a while, especially if it is not moving :).\nHowever if stock is moving up, you are protected :).  \nWhat you can do is buy call, buy put..that's known as a stradle.  So you can benefit from upside or downside movement.  The key is to find a stock that likes to move a lot (GOOG =D )\n\nAleks
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Sell when your in need of money. Coca Cola is a good stock. It also pays dividends.
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If you are in it for the long term, then any time is a good time. Don't try to time the market. It's a bit difficult to win at that game. Just make sure you take advantage of dollar cost averaging by investing regularly. This way you can buy more when the stock is low and less when its high. \n\nTo answer your first question, there is suppose to be a correction in the stock market. It's suppose to fall 10%. Some say the correction is happening right now. Especially since it's been falling for a week now. \n\nAnyway... do a lot of research. Now may be a good time... or maybe not. You know people aren't really suppose to give financial advice unless they want to be held liable for it. Especially in print. ;) good luck!
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* Hold for more than a year to make the capital gain long term instead of short term.\n*  Sell it in the same year you sell a stock you have a loss on, allowing the gain/loss to wash\n*  Donate appreciated stock to charity instead of cash.  You can deduct the appreciated value of the stock as your contribution.
50554
Look at how much you invested and how much you've lost. Then, figure out how much you could "lose" before you HAD to get out. If the calls are still worth more than your exit point, you COULD keep going.\n\nWhile we're about 5 weeks away from the expiration of your options, time decay will start kickingin soon. Playing with options close to expiration is very risky.\n\nLearning point : When you invest in options, set two exit "points". The lower one will serve to limit your loss. The upper one will require some mental discipline and limit your profits.\n\nMany investors with a profitable stock/option want to let it ride. Unfortunately, even good stocks/options can quickly turn sour, costing you $$$. In the words of Jim Cramer...\n\nBulls make money.\nBears make money.\nPigs get slaughtered.\n\n\nGood luck!
930567
Stocks, after their IPO, can go up or down.  \n\nBe very careful. If you're putting money into something that you know nothing about, know little about the mechanics, don't know what will make the stock go up or down and/or can't afford to lose this money - then this is gambling.\n\nMy recommendation is to save your money, invest in prudent investments for your situation.  This doesn't necessarily mean that you can't take on risk for high returns - it just means that you need to be careful and should probably do more homework before blindly throwing your money around.  You work hard for your money, don't neglect it. Treat it with respect and it will treat you nicely.
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There are sites such as sharebuilder.com that have very low commissions but they execute your order in a non-timely fashion.  It's a decent way to get started investing.
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I'm buying carefully chosen stocks that appear to be very undervalued with big moats.  \n\nI sold out a lot of positions just before the fall so have plenty of cash - planning on putting about half of it back in the market between now and mid July.
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1. read vociferously\n\n2. find a good teacher; save yourself a lot of money in losses and invest it in a proper education of trading
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You can do  that by many ways.Buy and sell share, by spaculate a good price, you can invest in lands or buildings, which you will sell later for a bigger price, you can do some retail trade, you can offer some information for people how have no time to spend for search.
948770
Two ways. One is buy low and sell high. Second is by a sound stock that pays dividends and hold it for a long time.