[ELI5]How do day traders lose money, why would they sell their stock for a loss in a day insyead of waiting for the cost to increase?
In: Economics
I’m assuming options trading. You can buy / sell a contract that expires at the end of the day. The market can work against your “bet” in a way and when the contract expires.
Say you buy a contact for $100 that states , if the stock moves up by $5 I will buy it from you. Someone can buy that contact from you, and if the market actually goes up 5$ you can sell it and make a profit. If it does not , basically you will own a worthless contact but will have lost the $100 you used to buy it.
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