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What Are the Best Tips for Selling Stock?

By Osmand Vitez
Updated May 17, 2024
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Owning stock is a common way individuals make money through investing. Many open stock exchanges have various stocks and other securities an individual can purchase when making investments. Selling stock at the right time is key to avoiding significant losses and cashing in on major stock increases. The best tips for selling stock include using stops, selling at a percentage growth in a short period, looking for price increases with weak volume, and selling shares at multiple points. These tips are just a few among many for making money through stock investments.

When purchasing stocks, investors should always use price stops, especially for particularly volatile stocks. Investors typically set these stops at a percentage below the original purchase price. For example, an investor may set a price stop at 10 percent below the price for a certain stock. If the stock’s price drops at least 10 percent at any given time, the brokerage house automatically sells the stock. This helps preserve losses for the investor when selling.

Investors should always be monitoring their stock and the company behind it. Any time a price increase occurs in a short period, investors should consider selling the stock. A price increase of 20 percent in two weeks, for example, may represent a short peak. Many times, stocks will begin to pull back some, shortening the gains an investor can make. Selling stock — at least a few shares — can help lock in some gains for the investor.

Two major indicators in stock and securities investments are price and volume. Most finance websites and brokerage houses report both figures each day, often in a real-time format. Selling stock for gains may result when a stock’s price increases on weak volume. The stock price should really have a significant increase in order for this to be profitable. Again, selling a few shares out of a large block helps lock in gains, while the remaining shares may continue to advance gains.

Investors who adhere to the buy-and-hold strategy often retain stock for several months or years. Watching the stock market and individual securities is still necessary in order to profit from individual stocks. Investors should look to sell these stocks at various points throughout ownership. For example, after an especially profitable earnings report, investors may decide to sell a small group of shares. If the stock price continues to rise during the next week, selling additional stock can increase gains again.

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