If you buy $100 worth of stock, what is the most money that you could lose if the stock goes down?

Question

A. $10

B. $100

C. $1000

D. Unlimited Losses

Answer 1

None of the above. B is the closest, but not entirely accurate.

If the stock goes to zero, you will loose your $100 plus the cost of your trade.

Answer 2

IF you BUY a stock...in other words take a LONG position in the stock...the most you can lose is the amount you have invested..you don't put yourself at risk for MORE than your investment..


There are some other scenarios where you can lose MORE than you invest, such as buying on margin, short selling and options, but these are not applicable in this question..
the answer is B.


The answer is not D. You know the most you can lose...if you want to take into account that you bought 100 worth of shares, and when you bought those, you paid a commission, lets say 15 bucks....well then you lose the investment plus commisssions..Ok that's true, but the question is not taking commisions into consideration. Also it is true that you only LOSE money when you sell...if you bought a $100 shares, and they declined to $80..you are only losing on paper..you still own the stocks..they can still go back up...you don't have to pay any extra money when the stock goes down in value..IF you BUY it....

Answer 3

D unlimited. You could lose 100% of your investment of $100 and you would also lose the amount of the fees that it cost you to buy/sell that stock. If you sell this dog you would also lose any potential gains if it turns out not to be a dog.

Answer 4

D, If you shorted $100 worth of stock.

Answer 5

B.

Plus the cost of making the trade initially, so somewhere between $8 and $20 additional. (cost to buy or sell stocks per the broker you use).

Answer 6

That is a bad question, because you don't lose anything until you sell the stock, just because it goes down doesn't mean it will stay there. Watch Google and you will see my point.

Answer 7

B all your investment