I try to be good :). I think buying low is always good, and if you’re not a daily trader, or want to swap shares or trade them, adding when it’s low and increasing your position is very smart. Of course there’s no guarantees that there won’t be companies that go belly up from this craziness, but that can’t really be helpedz But it seems like many stocks I’ve looked at on nyse or Nasdaq don’t really have a huge volume spike. A bit of course, but not a whole lot. As in many of the shareholders are pressing the sell button and are running away. This is a comparison to the volume before the corona virus and I don’t have numbers, just things I’ve seen and just stood out.
(So it still could be that the same amount of volume could drop the market as much because of the lack of willingness to buy so having to sell at a cheaper price and just a domino effect.)
Let’s add betting that it’s going to fall or shorting or borrowing shares with a promise to return and you’re holding as the market goes lower so you can buy them back at a cheaper price and return them to the original holder and keep the money from the spread. So if someone borrows 10000 shares at 10.50 or a there about price where there could be a selling of 10000shares, which might be a spread down to let’s say 10.25. Now you have in your account somewhere between 125-150k dollars. Not like you can take it and run to the Bahamas. It’s all regulated and controlled money. You’d see a selling of 10000 shares pushing price down just like if someone had a market buy order. Now you’re betting and hoping it won’t go up cause you’d have to buy higher and add your own cash. You’re in this trade already for 125-150k dollars. Let’s say hundreds do this because we all wonder what if it goes down. Well it is now, per say. The next trade might be someone selling shares or it could be another person shorting or borrowing shares. By the end of the day, you start seeing the price start to rise after falling because usually around 2:30ish EST is a good time to start looking for 10000shares to buy at a let’s say 8.25 price. Weather your buying on the ask or bid. You just spent about $82500 buying back with your cash and you electronically return to owner and keep the remainder. There’s fees involved and it’s obviously a little more involved than that, but that’s basically it. The fact that market so called “recovers” huge percentage gain in the last 1-2 hours of market trading shows this pattern. The problem isn’t when one does it, the problem is when billion dollar hedge funds do it when a lot of the market is already trading at a bloated inflated per share price so. As in share to dollar value as an example, aa/pl is trading or was trading last I looked at like 20 times the actual share value. Why would you buy it? At that price? Because you had a good chance of being able to sell it even higher to the next buy and profit because it’s a very liquid market. Let’s raise the stakes just a bit and this is just a personal unproven opinion....what happens when a country does it to the USA market? Not trying to make this political, but in my opinion the fact that we had the gain we could lose where many will suffer their gains for the last few years, as a country, we had gains to lose. We had an economy to lose from, we had job growth to lose from. In this case falling from higher is much better than being under and adding losses while already under water. Going further into the virus and oil and China and market crash and politics would really not be worthwhile in this convo, nor really want to publicly, but I’m just going to say, that this market fiasco is hurting but we’re gonna get back up. This will hurt many and maybe even the next generation, but we’re going to prepare the next generation with fixing the potholes we fell in and we’re going to recover. Cause we’re Americans and we’re the hardest working country and therefore it’s earned.
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