I was going to write a debate analysis, but Fallows over at The Atlantic sums up my feelings pretty well….so instead I will write about something else like shorts!
I added shorts to my day trading strategy today and made out pretty well. For those of you who may not know, day trading is the practice of buying and selling a stock in a single day for a quick profit. Your typical investor wants to buy low and sell high, this is known as being long. Being short, is the exact opposite, you sell high and buy low. Well you actually borrow someone else’s stock at a higher price, sell it and then buy it back when the price is lower, pocketing the difference. Example follows:
-I borrow stock ABC at $3.00 and sell it
-I pocket the $3.00
-When stock ABC goes down to $1.00 I buy it
-I give back stock ABC to its owner and pocket $2.00 in profit
It requires that you prefer a stock to go down instead of up, it's like cheering for your team to LOSE, because you have bet against them, even though they are still your team. It felt weird up until I pocketed my bread, then it wasn't that bad!!! There are a ton of other cool derivative instruments out there that allow you to make money during slower, unpredictable markets the key is learning how to use them effectively.
