By: Julio Perez, Spring 2018 IAC Graduate Research Assistant
Although my explanations of various investment terms should be useful for everyone, it should be apparent that some investment practices are too risky for your average investor and concepts such as liquidity and investing on margin might elude the average person shoring up funds for their retirement.
Day-trading is one of those very risky activities. Day traders rapidly buy, sell and short sell stocks throughout the day in hopes of making quick profits for the brief moments they hold on to said stock shares. Realizing the high risk involved in day trading, the SEC put out an investor publication warning potential day traders of the severe potential losses, how day trading is not “investing,” and most notably, how they should not believe in claims of easy profits and beware of hot tips from websites catering to day traders.
Translated: “I was a day trader until I lost all of my savings by engaging in such extremely high risk activites.”