New Century Energy Corp (fka NCRE)

[pennyplayer]

There's no limit to how much it can go up. If xyz goes from $100 to $200 that's a 100% gain. If it goes to $300 the next day, that's a 200% total gain. However, that's only a 50% gain the second day. Add your percentage gains together and you only have a 150% gain, which would put your original $100 investment at $250. You just shorted yourself $50, and in the same way, you are exaggerating your losses when you measure them in this way.

If the $100 xyz goes down 10% for two days in a row, that's not a 20% loss. It's only a 19% loss because the first day it had to go down $10 to record a 10% loss for the day, but the second day it only had to go down $9. The longer this continues, the more pronounced the difference becomes. If you bought NCEY at the high of .74, today's .1875% loss from the open is only an additional 4% loss for you, on top of what you've already lost.