As I write this, there is a major turmoil developing in the world markets. Bear Sterns is already down the dump, being almost acquired by JPMC for as little as USD 240 MM. Lehman has had a bumpy ride on the last two days. Yesterday, it was down by more than 40% at one point in time, and today, its up by 35% on the back of positive returns.
Anyways, as people debate over the future of the financial firms, and these wall street barons, I have put on my first real trade. I am short on ABCD stock and have hedged that by being long on the index. ABCD was down yesterday, and I had made a small profit yesterday. However, today, it went up and up, and I have more than 4% loss for the day. I would wind up this position at 5% loss.
First learning from the trading:
1. Never short a stock which is backed by a strong promoter having large holdings. The promoter can stand at a price, and even when the whole market is falling, the stock may just stand at one price.
Anyways, as people debate over the future of the financial firms, and these wall street barons, I have put on my first real trade. I am short on ABCD stock and have hedged that by being long on the index. ABCD was down yesterday, and I had made a small profit yesterday. However, today, it went up and up, and I have more than 4% loss for the day. I would wind up this position at 5% loss.
First learning from the trading:
1. Never short a stock which is backed by a strong promoter having large holdings. The promoter can stand at a price, and even when the whole market is falling, the stock may just stand at one price.
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