Closing a Long Position and Then Shorting It Right After?

DaveDoggyDogg said:
Sorry for the stupid question but im learning and i not trying to do anything illegal and go to jail or get fined, im poor enough as it is.

i hear about pump and dump being illegal and im kinda confused, but i was wondering if, i buy a stock and then close the position and collect my gains and then SHORT it right after on the same day with a daytrading account that has the shorts available?

example: i buy BAC for 24.00 then sell BAC 24.25 for a profit and then immedialty short it at 24.24 and then close the short position at 24.15, and then buy BAC again at 24.16 and sell at 24.25 again.....ALL IN THE SAME DAY?
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Congrats! You've been anointed!
 
DaveDoggyDogg said:
Sorry for the stupid question but im learning and i not trying to do anything illegal and go to jail or get fined, im poor enough as it is.

i hear about pump and dump being illegal and im kinda confused, but i was wondering if, i buy a stock and then close the position and collect my gains and then SHORT it right after on the same day with a daytrading account that has the shorts available?

example: i buy BAC for 24.00 then sell BAC 24.25 for a profit and then immedialty short it at 24.24 and then close the short position at 24.15, and then buy BAC again at 24.16 and sell at 24.25 again.....ALL IN THE SAME DAY?
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Nothing illegal about that trading tactic. Also, as someone stated, most trade execution platforms has a button that allows you to do all that in one click (buy the sell) or (sell then buy)....you'll see that button sometimes called "position reversal", "trade reversal", "buy/sell", "sell/buy" and many other short names depending upon the platform. It's a tactic used mainly by daytraders, scalpers and automated trading systems.

You'll generate (pay) more commissions to your broker and that will make your broker very happy although your account will shrink if your profits is not greater than your commissions.

This is why we as traders need to spend time learning our trade execution platform so that we know what all the buttons are (their function) prior to any real money trades. If you don't know (didn't feel like learning them)...just call the tech department of your software but most platforms have a operation guide that your can download and read...

Some even have online videos at the broker website.

Generate enough money to your broker via doing such type of position reversals...you may even get a Christmas card from the broker during Christmas. :sneaky:
 
bookish said:
It seems like if an amateur were to try this they would most likely loose. Am I right?
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Any trading has risk with any account level, amateur or not. In any case, you need $25k minimum in your account to day trade because of US regulations. For the details of the regulations, read about pattern day trading/trader (PDT) rules.
 
DaveDoggyDogg said:
Sorry for the stupid question but im learning and i not trying to do anything illegal and go to jail or get fined, im poor enough as it is.

i hear about pump and dump being illegal and im kinda confused, but i was wondering if, i buy a stock and then close the position and collect my gains and then SHORT it right after on the same day with a daytrading account that has the shorts available?

example: i buy BAC for 24.00 then sell BAC 24.25 for a profit and then immedialty short it at 24.24 and then close the short position at 24.15, and then buy BAC again at 24.16 and sell at 24.25 again.....ALL IN THE SAME DAY?
More...


It appears you are new at trading so you need to be aware of the wash sale rule since it is doubtful if all of your transactions will be profitable.
 
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