Tags: question, sellers, short
Categorised in: Earn Online
A lot of beginners in trading dont really understand selling short and how dangerous it is on their trading account.
Here is an example: a short seller sells 5000 shares of a stock at $1. Then after the market closes, FDA approves a company
drug. This good news will make other traders go long. In the morning the stock jumped up to $10.
This short seller has lost all his money $5000. In addition he has lost $45,000 of broker money. So he will receive a
margin call asking him for the whole money lost. Now the short seller is in debt.
To avoid this, try only short selling in virtual account and day trade only. Never hold a position over night. Anything can happen.
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