How many stocks should you own in your portfolio? Why there s no single right answer
How many stocks should you own in your portfolio? Why there s no single right answer
Amena SaadMar 1, 2021, 22:17 IST
Most investors can reap the benefits of diversification from owning 20 to 30 stocks.Bloom Productions/Getty Images
The number of
stocks you should own depends on factors like time horizon, risk appetite, and your overall financial goals.
While there is no perfect
portfolio size, the generally agreed upon number is 20 to 30 stocks.
When managing your portfolio, it s important to consider a diversification strategy that mixes a variety of investments spread across asset classes and industries.
Short selling is a high-risk but high-reward trading strategy that profits from a stock price s fall
Short selling is a high-risk but high-reward trading strategy that profits from a stock price s fall
Clint ProctorFeb 5, 2021, 04:17 IST
Short selling is a bet that a stock s going to slump in price. It can mean big profits if the drop does happen. But it can also lead to large losses, if the shares price rises.blackred/Getty Images
Short selling means selling stocks you ve borrowed, aiming to buy them back later for less money.
Traders often look to short-selling as a means of profiting on short-term declines in shares.
Cryptocurrencies
Options trading examples
To show how options trading works, let s walk through a couple of scenarios.
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Call option example
Let s say you buy a call option for Big Tech Company with a strike price of $500 and an expiration date of a month from now. The lower this strike price is in relation to the Big Tech Company s current price, the higher the premium you ll have to pay.
Let s say your premium is $10 per share, and the options contract is for the standard 100 shares. This means you ll have to pay a total premium of $1,000 for the option. However, if shares in the Big Tech Company rise to, say, $600 before the expiration date, you ll make a profit of $100 per share, or $10,000 in total (minus the $1,000 premium).