Investment in stock market is a risky business at some point when anyone decides to invest his or her capital in stock they are aware that this market is volatile prices of shares will go up and down simultaneously what will be the situation is the investor will either make good profits or will lose his investment as we have seen earlier there are two things when investing in shares either one earns profit or loses, the most disturbing phenomenon is when stocks on which people have full belief go down then in this scenario it is difficult for an investor to make money.
Here are some ways by which an individual can make money if his or her stocks go down the first step is to have a margin account this account will be used by you to borrow the shares that you do not own. This method can be used when after you watch and decide that certain shares will or are likely to go down
For example if you already have a margin account, you will decide to take 100 shares in X company, which translates into Rs 1000 Rs 10 each share. By shorting these 100 shares, it means that you are merely borrowing those shares from your broker. Soon, as you had visioned, the shares go down to 5 Rs each. If explained in short we can say that you are encashing the shares which you do not own.
Then the second one option trading in this we can say that as we know or everybody knows that investing in shares is a risky business so invest at time when shares are falling and one can make profits by doing options trading here a trader can make predictions on movement of any share either they are rising up or going down. In this trading method, the main thing necessary is the direction of stocks.
Making profits when shares are falling is a necessity which should be perfected by anyone the most important thing is that which stock is rising or which stock is falling there are several books written on this papers and manuals on this These materials do not provide rules, but just guide you to learn the trade.
As a trader, it is important to keep in mind that such material is for general information only and it cannot be used or relied upon important decisions related to investing.