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Ok first of all let me explain something. I desperately want to start investing some of my liquid cash that i have been previously squandering on useless things in something constructive. I want to get into this trade and will be looking for a mentor in the near future.
However i have a burning question as of right now that i need answered so as to give me a leg up on this path.
I know there is a touch of wrecklessness involved in this hypothetical but please feel free to throw caution aside as i am in a very confident position.
LEts assume that i know for sure that the stock price for company X is going to go down, by a minimum of 3 dollars in the next 3 months or (even tomorrow) What would be the best way for me to exploit this situation for maximum profit. (Please assume for certain that the stock price decrease is a given)
Also, i have a maximum of only 17k set aside for this particular example.
Please advise on the best method.
Ps..Put options have been mentioned to me by a friend, supposing the stock is currently at $45, this would require me to risk 17k for a very small profit. (unless i misunderstood him.)
Please help.
And while you are at it, is there any broker who provides practice trade accounts that can recommend?
thanks in advance |
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monkey - I don't actively trade stocks anymore but the most bang for your buck is in options in my opinion. Now there's a million different ways to make a play using options so you'll have to read up on what is best for your scenario. Buying puts is a quick and easy way where your risk is limited and potential gain is unlimited (in theory). But, just buying puts is not always the best play either.