Ok, this week my stock went down 4 days in a row, but I made money each day. How did I do this?

Question

It wasn't interest, dividend, or yield by the way.

I forgot to add I live in Canada, and by a different set of rules.

Answer 1

Shorting the stock.

Answer 2

You shorted your stock. A bearish move sir. Risky, but if the bad news was as dire as you thought and you completed your move in a timely manner, well, then it's off to Disney World.

Shorting a stock is basically selling someone else’s shares in a particular company with the contract that you will buy them back at a later date. When you buy back at a later date, this is called covering. You take your profit or loss at the point when you cover.

When the stock you took a position in goes up, you are liable for the increase per share since the time you took your position. If the stock goes down, you make the difference in profit. If there was a dividend paid during your position, you will be liable for paying back the original owner.

I believe, Kenneth Lay's son is a chip off the old block. Would you agree?

Answer 3

Shorting the stock or puts both work. But in Canada, you might be able to enter into a Contract for Difference (CFD) where you pay the stock return and the other side pays floating rate -- which is illegal in the US. In the US, you could do something similar with an Equity Swap.

Answer 4

stock is cheap more buyers increased money in company. i think that would be logical in relation to economics. But i could be wrong. i know the NAsdaq took a hard fall a couple days ago

Answer 5

Did you short your stock? Very, very risky move!!! Have you considered put options?

Answer 6

you are shorting the stock or you use option

Answer 7

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