Question

Please help me with my Economics homework?

11. The following chart is of Netflix stock. What is (approximately) the most you could have made shorting this stock over a six month (or less) time period; and write on the graph when to buy and sell. Week of Sep 22, 2014: NFLX 448.75 2010 Apr Jul Oct 2011 Apr Jul Oct 2012 Apr l Oct 2013 Apr Jul Oct 2014 Apr Jul Oct

Answer 1

Shorting of stock is buying the stock and sell it back in the given time frame. Thus in given 6 months time frame, to earn maximum profit, I would have bought it in starting of 2013 when it is available at around 100 and would have sold in 2013 July when its price is 250 to make 150 per stock.

An investor should buy the stock the price is at its lowest and sell it when it is highest. In `generic, you cannot predict the prices if stocks so you should invest at the time when the price of a stock is falling or the market is in recession. The market cycle would move toward boom in future and you will get maximum benefit.