It’s not a big deal when your stock price dips by 10% or 20%.
But when the market loses more than 10% of its value within a few days, it can really get your attention.
If that happens, you need to adjust your strategy.
For example, let’s say that your stock has been trading at $250 for a couple of weeks.
But your company is suddenly worth $600, and you need $3,500 to pay off your debt.
The new standard is for your company to trade at $600 for a few weeks before selling for $3.00.
The old rule was to trade for $1.50 for a while.
Now, when the stock drops by 10%, you’re not going to get a lot of your money back.
In fact, if your company trades at $1,500 for a week or so before selling, you’ll likely be out $3 million or more.
It’s not that trading at the $1 price is a bad idea, but you’re going to need to be willing to trade higher to avoid losing your money.
Another example is if your stock drops 10% in a week and then climbs back up by 10%.
If you’re in the market for an investment, it’s often the case that you can buy the stock at $400 for a month.
That would give you an immediate return of about $10,000.
But then, your shares will likely drop by another 10% within a week.
So what should you do if your market dips by more than 20% in just a few hours?
Well, if the price is still at $800 or $900, it might be time to stop trading.
A lot of people don’t have that option.
Some of these companies have to trade through their corporate offices to get paid.
This is one of the biggest risk factors when it comes to buying or selling stocks.
You need to understand the risk involved in trading through a corporate office.Read more