Top Caps Members... DISPROVE THIS THEORY
Here's a hypothetical situation
Lets pretend these are my funds in my account.
Broker Account #1
I have $500,000 USD
Broker Account #2
I also have $500,000 USD
I pick a stock that has VERY high daily flucuations, for arguement sake lets pick POT:US Potash Corp of Saskatchewan Inc
and let's take todays prices into account.
let's just say I thought $99 was a fair Value to get in on this stock because I think it will go up, but the other side of me is worried it would fall more, I then purchase 500 stocks in my Broker Account #1, and on Broker Account #2 I SHORT 500 stocks.
The Market Closes - POT closes at $95
Broker account #1 - I Lose $2 Buying the stock for a total of = -1,000
Broker Account #2 - I make 4$ Shorting the stock for a total of = +2,000
So now I cover all my shorts for a 2,000$ gain, but the other account has a loss of 1,000 with the stock at 95$, but I can now Just go in and buy MORE of the stock at a lower value, and when the stock eventually goes back to $99... I make all the money I lost back, +more..
Is this the trick to never lose, and always WIN in the market???
Can someone disprove this theory?!