Stock Markets Exposed
How do I lose money in the stock market (intentionally)?
I am playing the virtual stock exchange game and need to lose as much money as possible. Any specific suggestions? Thanks! All responses are greatly appreciated. Please don't give me really complicated answers. The reason I'm asking this question is because I'm a nwb... so please, explain simply, give simple advice, and I will be able to digest it easily and put the advice to good use.
Public Comments
- How about I just keep you posted on everything I am buying? LOL - just kidding. This is actually a great question, b/c this is as equally as hard as guessing which stocks will go up, bc there are ways to make money on stocks going down. Go to YahooFinance's "stockscreener" Look for the highest P/E stocks, with the lowest growth and profitability, and the highest debt. - Then look @ their charts and see which ones have been trending downward over the past weeks/months. That's a fantastic & tough question.
- If you are allowed to use options, you could simply buy far out of the money stock options and then immediately exercise them. If you are not allowed to use stock options, look for very thinly traded stocks with a big spread between the bid price and the ask price. This is particularly easy to do in after hours trading. For example, BDMS is very thinly traded. As of the moment the bid is $0.01 and the ask is $250.00. That would allow you to buy the stock for $250.00 per share then immediately sell it for $0.01 per share. Of course, I do not know if your game allows after hour trading. The same technique works while the market is open, but it is not as fast. When the market is open the bid-ask spread on BDMS is usually a little over 10% of the stock price, so you could buy the stock and immediately sell it, losing more than 10% of your money. If you repeat this several times you can go broke fairly quickly. Although I am fairly sure your game would allow these trades, I don't know if it would be smart enough to use the bid and ask quotes to determine the amount of your losses.
