About Day Trading

Video Transcript

"OK this is John Pinelli, financial representative and today we're going to be talking about day trading. Day trading can be a scary, scary topic. Typically the day trader will try to invest in a single day and what they're looking for is they're looking to generate a large return on their investment by buying a stock early in the day and selling it at a later point in the day. What they're looking for when they look for stocks to look into is they're looking for a stock that's maybe coming out with a press release, some pending news that's going to skyrocket the stock within that day, maybe an announcement that could cause investors to just start buying it like crazy and they're looking for something that is volatile which means it's going to, it has the ability to move up quite a bit in a single day. So day trading has been quite profitable for some of the Wall Street professionals in the past and with that success has brought a whole slew of casual day traders that do it basically from their home sitting at their computer making trades and analyzing stocks as they do so. So the individual day trader, your Joe day trader at home trading securities during the course of the day trying to make money, trying to look like a Wall Street professional making that, those big dollars, is going to put themselves in a position where they're taking on a lot of risk. There's a potential for a high reward within day trading but there's also the potential for loss, a lot of stress can come with that as well. And generally it's not something that is considered a wise investment strategy overall. Typically you want to invest for a longer period of time. Sometimes you can make money off of stocks that have declined significantly looking at recently some of the major financial institutions, some of the auto dealers looking at say Lehman Brothers or CitiGroup or maybe Ford or GM, stocks that have declined a significant amount over the past few weeks may offer that opportunity for a quick day trade to make money by buy at a low point and then sell at the end of the day looking to get maybe 10, 15 percent in a single day on your money. So that's been an opportunity recently for people to make money doing day trading and many have taken advantage of that. So this has been John Pinelli talking to you today about day trading."