Most financial markets are open between certain hours on a daily basis. Wall Street, for example, officially the New York Stock Exchange, is open Monday to Friday from 9am to 5pm Eastern Standard Time. Between those hours, Monday to Friday, hundreds of people trade units, buying and selling in accordance with the shifts and trends of individual markets. People trade everything from stocks to currencies, stock options to future contracts. Some markets are open around the clock, but day trading refers specifically to the practice of buying and selling financial units on a market on a single day.
If you’re a day trader, you might buy stock from the Coco Cola at, say, 9.30am. You buy 100 units at $5.00. You’ve seen the value of the stock is on an upward trend. When the market for Coco Cola – the market for beverages – opened that morning, the value of Coco Cola’s stock was $4.95. You buy at $5.00. You’ve watched the stock value carefully during the day. It goes up to $7.00 by 1pm. But then, after lunch, the stock begins to loose value. It goes down from $7.00 per unit to $6.90 and so you decide to sell the units of stock you bought this morning.
In the morning you bought 100 units of Coco Cola stock for...
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