ABC Company is currently trading at $100, due to recent regulations in its sector, Gab believes its shares will decline to at least $80 in the next 1 month.
So he borrowed 100 shares from his broker and sold them. 2/6
As planned, ABC Company reported poor revenue in its quarterly earnings and shares fell to $80.
Gab decides to close the short position and buys 100 shares for $80 to replace the borrowed shares.
His profit on the trade was $2,000 ($100 - $80 = $20 x 100 shares = $2,000).
Jan 6, 2021 • 4 tweets • 1 min read
📈Looking to take a position? (i.e buy or sell an asset to make gains)
Apply this easy 3-step process to design a trading strategy that protects your money and helps you stay disciplined.
A stock split is an action taken by companies who have witnessed an increase in share price to levels that are either too high or are beyond the price levels of similar companies in their sector, to divide their existing shares into two or more shares.
