thinking about shorting marijuana stocks? watch this first! // cannabis hemp pot weed short selling, marijuana stocks to buy, marijuana stocks to buy now, marijuana stocks to invest in, marijuana stocks brokers, marijuana stocks canada, cannabis stocks, hemp stocks, pot stocks, weed stocks, marijuana stocks list, medical marijuana stocks, marijuana stocks on robinhood, marijuana penny stocks, penny stock broker, best penny stock broker, trading and investing options and stocks, medical marijuana investment, make money in stocks, otc stocks, strategy for trading or investment david moadel looking at the markets with david modell so you're thinking about shorting or short selling marijuana stocks well i want to recommend against it and i'm
marketwatch com aapl, going to tell you why and i'm going to show you a couple of examples marijuana stocks are usually low priced stocks penny stocks for example most of them
are many of them are penny stocks and these are volatile stocks these are stocks that can go yes they can go down 10 20 30 or even fifty percent in one day sure and if you're thinking that you might profit from those kinds of down moves then yeah you maybe you're considering short selling the stock but they can also move up a lot in one day
they can move up 10 20 30 50 100 or even more than a hundred percent in one day or in a few days or in a few weeks it can happen and it does happen and if you short or short sell a marijuana stock and then it goes the price goes way way up you can actually owe your broker more money than you have it's not just a matter of losing all the
money in your trading account you can actually lose more than that you can lose everything in your in your account and owe more money to your broker because it's not like you bought a stock and then it went down see a stock can only go down so much the price of a stock can only go to zero so when you buy stock you cannot lose more than what
you paid for that stock but if you short or short sell a stock theoretically the price of a stock can go up higher and higher and higher there's no you know there's no ceiling to it there's no end so theoretically you could just go up forever and you could just oh more and more and more money until you actually have to pay your broker more money than
you even have and you can get margin called and they could liquidate your account and things can get really bad and i want to show you an example this is not a marijuana stock but this is a market watch article and this is a it's a biotech stock it's kalobios kbi oh and again not a marijuana stock but shows what can happen here's a trader who lost
over a hundred thousand dollars and he shorted or short sold this stock he thought i guess maybe he thought it went up too much and that it was going to go down but this stock because of some news it just went way up overnight and you really you know you don't always have control over what happens especially if it's after trading hours if it's
overnight you might be helpless to even cover your short position until the next trading day and so this person owed a lot more than he had in his hands trading account it says here according to the marketwatch article he had around 37 thousand dollars in his etrade account and then he woke up the next day not only was that wiped out he
actually owed over a hundred thousand dollars and he it says here he may end up liquidating his 401k and his wife's 401 k so penn i'm not you know if you think i'm trying to scare you i'm not trying to scare you i'm trying to make you aware of the risks and this is why i don't recommend short selling any low priced penny stock and that would
include marijuana stocks which are also capable of skyrocketing very quickly in price let me show you another example and this is a marijuana stock this is mjna and and this has a similar chart too many marijuana stocks they they peaked a lot of them right around the november early november election in 2016 recently and so imagine if you you know
that the stock was trading at around six cents here in october and then it went up to seven cents and eight cents and you might have thought well that's that's a pretty big gain there i think it went up too much i think i'll short it here and then well then if you had shorted there it went sideways and then it went up to ten
cents and then it went sideways and then it went up to twelve cents and then up to 13 and 16 so it's already doubled in price and now it's up to 23 cents over here at the peak and you can see that it went down after that but you wouldn't have known that you only know what's happening in the present and what happened in the past and so at this
point in time you would have shorted it at around eight cents and now if you wanted to cover your short position or buy back the shares of stock it would have cost you twenty three cents a share and that would be probably pretty devastating to your account and if you think you'll just sit through it and wait until it goes down well it did go
down but you didn't know that was going to happen you probably would have been getting emotional all the way up watching you know watching yourself lose watching your account go down and down and down until you oh you don't even have money anymore now you owe money possibly to your broker also your broker might not have had the patience to sit
and watch you owe them more and more money brokers are known to liquidate your account and initiate a margin call whether you like it or not if your position if you're short position goes against you badly enough which this this would be a case of that possibly happening okay and also who you know who knows the the stock might
have just kept going up and up and up past 23 cents now what actually did happen was it went down but so far months and months later or at least a you know a couple of months later because if you know now it's 2017 already and the stock still has not gone down to eight cents it's still 16 almost 17 cents it's it's still worth twice as
much and so you'd still be in big trouble all right so that's my argument to you against shorting or short selling penny stocks i recommend you don't do it just because the risk theoretically is infinite you can lose so much money so quickly and that's true of any low priced stock now with higher priced stocks such as you know amazon or google
or something like that you know i know those are not marijuana stocks but with those stocks you don't even have to short those either you can buy put options and i have videos about buying put options and call options and things like that but for marijuana stocks generally speaking right now they don't offer put options and so you can't buy
puts on those stocks right now maybe that'll change someday but for right now i recommend only going long if you feel like you must invest or trade low-priced stocks such as marijuana stocks not that i'm recommend recommending that you buy or sell anything right now i'm not telling you what to do i'm just telling you what i don't recommend for myself
alright so i hope this was helpful to you and if it like to email me at any time maybe you have questions or maybe you'd like to put together a trading plan because you know i certainly can help you with that or an investing plan my email address is david modell @ gmail.com and you can contact me anytime if you like this video if you found it
helpful please give it a thumbs up on youtube and leave a comment also please subscribe to my youtube channel so you can receive the latest updates on my financial educational videos thank you so much for watching i appreciate it and i'll talk to you again soon
