@Myridium If anything, it should concern you that people who lack such basic knowledge of economics would invest in. I found a 75 year old Nickle, did I hit the jackpot? In either case, bankruptcy is not good for a company’s stockholders. If a company files for bankruptcy, it should work hard to pay off and reduce its debt load and operating expenses to stay in business. Corporations are a kind of investment that has what's called limited liability. Say the stock goes up 20% then your stock is worth $360... you sell it.. pay back the $200 and you now have $160 of your own money (less brokerage, interest and tax).. so you have made a 60% profit! It's more sensible, however, to value your assets in a currency that is stable and tied to most of your expenses. I still owe the bank that 1 share. The valuation chart fluctuates, but you're not seeing your purse of fiat currency changing in any way after the initial outlay. Some stock owners may sell their shares and abandon ship at the first sign of financial trouble. I would say that capital gains/losses are unknown or hard to measure rather than hypothetical, but great answer regardless. Press question mark to learn the rest of the keyboard shortcuts. This is how many become filthy rich fast. However, that money might be considered either capital gains or … Many other answers explained the difference between realised and unrealised loss. Seems like an easy way to make money, but I know lots of people have lost fortunes on the stock market. This is the viewpoint that says "If I have an ounce of gold, I have an ounce of gold, no more, no less." Selling the holding crystallises the loss, which for many investors is a difficult mental stumbling block. So I'll have to buy it at $150, and give it back to the bank. I sell my 50 shares at $0.01 each. In the period leading up to, during, and following a bankruptcy, the financial issues are almost certain to affect shareholders. The share price has since recovered to €126, and some analysts have tipped it to almost double over the coming year. What do you think will happen with the stock market regarding the US election? Does spirit guardians hurt friendly creatures if they were not visible at cast time? Subsequent changes in the exchange rate only vary the hypothetical value of what you would get if you wanted to trade back. 101. Look to oil-dependent Aberdeen, Banks likely to play follow the leader on account fees, The stocks to buy for a Biden win or a Trump triumph, Why fleeing the city for the countryside may blow your budget, Zopa launches first credit card but experts warn against its 'sub prime' 34.9pc interest rate, Property market braces for final rush of 420,000 sales before stamp duty deadline, Four stocks that have lost half their value but fund managers are still buying. And yes, normally the "market" will sort that out extremely quickly, since stakeholders take advantage of the arbitrage forcing equilibrium. But if you buy them on margin, or mess with options, you can. If that money is required in the near term, betting on a share price recovery may not be a smart move (although being invested in a stock with a short time horizon is highly unwise to begin with). That way, if the stock does go down, the value of your options will increase (depending on expiration date) and you will make money of the options. Glad to see an answer which really hits the nail. You can, of course, but be extra cautious compared to trading, say, Dow Jones values. why does the Twitter CEO look just like a homeless bum that you would see walking on the side of an interstate? Of course he loses money if the price goes down. When you buy something like the above, you are giving up your "real money" (fiat currency) to take possession of said commodity/stock/bitcoin/etc (let's call these assets in general). You can sell it for 50 dollars, so you lost 50 dollars. If you kept it, maybe the stock price will eventually go back up above $100. Making the most of your one-on-one with your manager or other leadership, Podcast 281: The story behind Stack Overflow in Russian. You don’t owe money. I would like to add another aspect: minimize loss, in case you want to protect your principal (and commission paid when you bought Bitcoin). It filed Chapter 7 bankruptcy in January 2020.. The price then drops to almost no money at all, the company is going bust and shares are worthless. Isn't there basically a 50% chance that stocks will rise after I buy the shares? I have $45 and 50 shares. Get your answers by asking now. Companies that file for Chapter 7 bankruptcy close their doors for good. Do you think your 401k money (that’s invested in the stock market…) is safe? It could get so bad that the stock is delisted from major stock exchanges. Chapter 7 is the “bad” kind of bankruptcy. If the answer is "I can buy less for the same ammount of bitcoins than I could before the lowering" then yes, you did lose a quantity of your money. The new stock the company sells may have a “V” at the end of the ticker name or won’t have any additional letters..