101,000 Many of those who have had short experience in the financial market claim that all kitchen brokerage companies and that to receive regular income and increase it is almost unrealistic. However, in this confession the sadness of traders carefully concealed one fact – training and theoretical baggage. In particular, there are no of these two components. Before you invest money and hope for earnings, you need to learn all the main ideas and all the dark corners.
One of the main concepts that a trader should operate is the so-called short. Let’s find out what shorts are.
So what are shorts? Short, or short, means short in English. When integrated into the financial market, a short position is called a short-term position, the purpose of which is to make money from the collapse of the market. Many newcomers see shorts as offerings through the prism of time, that is, its duration. That’s not quite the case.
Trader buys this other financial asset from a broker and sells it at a different price. When it falls again, the trader buys the asset and sells it back to the broker.
Let’s take a look at a practical example.
Imagine what you expect when Apple’s stock falls 10 percent. You borrow 100 Apple shares from your brokerage company, for example, for $85. Apple shares reached $75. You buy them at this price and return the “loan” of the brokerage company, earning the difference.
Short can last a day, or maybe a week. Long hour, two or half hours. It is worth noting that Long is the brother of the hero of our article. English has long translated for so long, but, again, it has nothing to do with time. The name of these two concepts is associated with the growth or collapse of the market. The first is longer and the second is faster.
What is better – short or long?
Answer the question which offers to make more profitable – shorts or long, you can give yourself only yourself, because it all depends on your trading preferences and skills.
There are traders who simultaneously open both shorts and long positions, pulling away from risk. It is worth noting, however, that none of the directions is deprived of them.
As for the profitability of debts – you can wait long enough for this, and shorts may not play into your hands. They also convene cases where a brokerage firm forcibly closes shorts before closing the shareholder register. This does not bring any benefit to the trader, but the broker receives dividends. However, it is worth understanding the rules for creating shorts and longs. You never know what’s going to happen in the market.
Post Basic Concepts of the Entrepreneur: What such shorts appeared for the first time on the G-Forex.net.