All forecasts suggest that this business year could be negative for the interests of small and medium investors. After many years in which investment in equity markets has been very positive, with annual returns on savings around 10%. Now it seems that this trend has been broken, but with the advantage that there are financial instruments that can recover the downtrend in financial markets. As in the specific case of the sale on credit and that we are going to clarify how to formalize this very special model of private investment.
Selling on credit is a model that is based especially on the fact that it can profit from dips in stock markets worldwide. Because, in effect, any depreciation of securities or stock indices can be used by small and medium investors to achieve a substantial return on savings. However, the greatest danger in their contracting comes from the fact that the losses are more pronounced than in other classes of financial instruments, such as the purchase and sale of shares on the stock market in the most classical sense.
While on the other hand, the sale on credit is a more advanced investment model that is also characterized by imposing shorter retention periods than in other formats. Generally they are operations that go in terms of 3 or 4 months and that is the period in which the values must depreciate. Whatever the case, they are movements that carry many more risks and therefore you will have no choice but to provide further learning in this type of operations in the equity markets. You cannot forget that there is a lot of money that you can leave in the end.
Credit sales: open positions
The first question you should ask yourself from now on is when to start operations with these downward movements. Well, it is very clear that it materializes when the bags begin or continue with a clearly downward trend. The more they devalue, the better for their interests as small and medium. Among other reasons because your capital gains will be much more substantial. Do not be scared because its mechanics work from this innovative dynamic and that allows you to always have business opportunities in the equity markets.
On the other hand, it should also be emphasized very above all that credit sales constitute a powerful tool for adapt to all scenarios in the bags from everywhere. This is a substantial difference from the traditional buying and selling of stocks on the stock markets. Any difference can involve a very important monetary amount, so credit sales should not be formalized for very large amounts since they can have a great impact on the income statement of your savings account.
What assets do you work with?
In our country, operations are limited more to stock market indices than to listed companies. To this end, there are short operations on all the main stock indices of the old continent. In other words, about the Ibex 35, CAC 40, DAX, etc. But also about the most relevant securities that comprise them and that usually coincide with those with the largest capitalization. For example, in Santander, BBVA, Endesa or Inditex, among some of the most important companies listed on the stock market.
On the other hand, it is much more difficult to make credit sales on small and medium capitalization stocks. They are not sensitive to this type of operation and on more than one occasion these movements have been prohibited because they can condition the configuration of the prices of these proposals in the financial markets. Beyond other series of technical considerations and perhaps even from the point of view of its fundamental principles. In other words, their operations are more limited in number.
Are you interested in these products?
In any of the cases, there is no doubt that you are interested in analyzing if we are talking about a product intended for the small and medium investor profile that you represent today. Because it is very important it is important that you know when it is important to highlight hiring this type of unique sales. As an example, in the following situations that we expose you below:
- Prior to high intensity drop in the stock markets and develop over a longer period of time.
- When a Change of trend, going from bullish to bearish since it is when the bearish movements are more accused.
- In the moments when the values pass a support and a downtrend of special consideration begins and that can take their prices much lower than they are today.
- In moments of clarity Economic recession which is when equity markets depreciate the most, even with violence that draws the attention of small and medium investors.
- In values that are in free descent which is the most negative figure that they can have given that they do not have support below and their prices can go much lower than until now.
- And in general, in all recessive movements in the international economy and cause the stock markets to collapse in a few days. It is a possibility that you can take advantage of right now.
Risks in operations
Although on the contrary, they are operations with very high risks and that you must analyze so as not to have more surprises in the coming days. Not surprisingly, there is a lot of money you can lose in each of the operations that have this feature. And among those that stand out the following that we mention below.
- His expiration dates They are much shorter and therefore you have to be more careful when signing a sale on credit.
- They are investment products that have commissions and expenses in its administration or maintenance that are more demanding. To the point that you will spend more money on its formalization.
- Like you investment approaches In the end they are not fulfilled, there is no doubt that you will be able to pay dearly for this decision that you have made to channel your investments through the sale on credit.
- They are more complex to understand and that they require a certain learning in their operation. If you are not enough with the conditions, it will be better to abstain from operations and dedicate yourself to other financial instruments.
- Being a credit modality, it is a very financial instrument more penalized than the rest. Do not forget it from now on since you can find quite a few obstacles on the way that you will have until its expiration.
As you may have seen, credit sales are an investment model that has many lights and shadows along the way. It is convenient for you to analyze it since it is a product that needs a greater economic effort on the part of small and medium investors. Where it does not serve you to formalize it without any rigor or technical analysis. Because at the end of the day what it is about in the end is to make personal wealth profitable, not to carry out any type of experiment on the stock market.
For that there are other more suitable financial instruments that do not require so much risk in the operations that you are going to carry out from now on. Not surprisingly, you keep in mind that you are looking for a different investment product and that it is definitely not about buying and trading stocks on the stock markets. Not much less, if not that on the contrary it is governed under other absolutely different parameters and this must be taken into account.
Intended for the short term
Small and medium investors have the opportunity to turn to multiple products to invest when stocks fall in the short term. In most cases it consists of derivatives whose purpose is to achieve high profitability in any market circumstance, be it bullish or bearish. Either way, they are products that are distinguished by both sophistication of your operations as well as the high risk that it implies for the interests of the investor. And that while you can make significant capital gains, you can also lose a lot of money along the way.
One of the most characteristic products are the so-called credit sales, and which this post is about, and which has a very well-defined operation. Where the financial entities are in charge of lending the securities that the client wishes, to later sell them at the price of the day. Then the bank gives the user a period to return the values at the price they have then and which, according to their forecasts, will be lower than the current one. From this dynamic, the investor will get the difference as long as the result is positive at the bottom line.
