Assume you own 500
shares; you can use this opportunity to book profits on 50% of your holding i.e 250 shares. Two
things can happen after you do this:
The bears make an entry – When this happens the market starts to slide down, and as you
have booked 50% profits at a higher price, and can now choose to book profits on the balance 50% as well. Your net selling price will anyway be higher than the current market price.
The bulls make an entry – It turns out that the bulls were indeed taking a pause and the
rally continues, at least you are not completely out of the market as you still have the balance 50% of your holdings invested in the markets.
Can Anyone explain to me what exactly happening here. I’m not getting any of it. Thanks
You have sold 5 shares @ Rs.20. Bear makes an entry and prices decline to Rs.15.
You sold remaining 5 shares @Rs.15.
Your average selling price will be Rs.17.5.
If the prices comes to Rs.18 and then again starts rising and crosses Rs.20 you will still have 5 shares with you to ride the rally.
I know I’m asking too much from you. And if you preferred not to answer this It is completely fine.
Can you tell my what holding a position, open positions means?