[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?

Question

[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

Answer 1

If there’s a chance the stock doesn’t rebound, they’ll sell at a loss to prevent a larger loss. For example, take a look at Plug Power. Lost over half it’s value in a month. That company was overvalue and will almost certainly not return to that level.