Short Term Investment Strategies

Investment is a long-term process, and the profits take time to capitulate. Share market strategies yield profits in a shorter duration. Online trading gives suppleness in planning your strategy. Here are a few trading strategies for Short-term investments.

Day Trading :

This approach involves buying and selling stocks in a very short period of time. Day trading is one of the quickest ways to make the investments pay off. Investors look forward to making profits from the rising share prices in the short term and hope the markets will be high. Market specialists advise that investors should not keep more than 10% of their budget in day trading as the prospect of achievement in day trading is moderately low.

Margin Trading :

In this approach, investors are likely to borrow a part of the entire sum to buy stocks from the trading account. The first margin is the money that the investor puts in to purchase the shares, and the balance amount is given by the stockbroker, who becomes the money-lender in this case. In this case, if the share price goes below a certain level, the money-lender will ask the investor to deposit more money to maintain the required margin.

This condition is not apt for both the investor and the broker and is called the margin call. It is not sensible to put the money once the margin call is made. In this case, the broker can sell the stocks and get back his own money, but the investor cannot cut short his losses.

Trading In Options :

This approach gives the investor the option to buy or sell the stock at a pre-set price. A call option is the right to buy, and a put option is the right to sell. The three gears are options price, strike price, and expiry date. The investor has the option to sell the stock.

Some Of The Important Points To Be Noted Here Are:

Investors go for the right to buy the stock at a preset price if the stock price is speculated to rise, and they go for the right to sell at a preset price if the price is speculated to drop.