Selling (Going Short) Zinc Futures to Profit from a Fall in Zinc Prices

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Contents

Selling (Going Short) Zinc Futures to Profit from a Fall in Zinc Prices

The current price of ZINC is 0.00241 USD today.

Will ZINC price drop / fall?

Yes. The price of ZINC may drop from 0.00241 USD to 0.0001034 USD. The change will be -95.7080%.

Will ZINC price grow / rise / go up?

Will ZINC replace / surpass / overtake Bitcoin?

According to our predictions, this won’t happen in near future.

Will ZINC crash?

According to our analysis, this can happen.

Will ZINC hit 1 USD in a year?

Not within a year. See above.

Will ZINC hit 5 USD in a year?

Not within a year. See above.

Will ZINC hit 10 USD in a year?

Not within a year. See above.

14 Days Historical Data

Date Opening price Closing price Minimum price Maximum price
2020-04-07 Open: 0.00241 Close: 0.00241 Low: 0.00241 High: 0.00241
2020-04-06 Open: 0.00241 Close: 0.00241 Low: 0.00241 High: 0.00241
2020-04-05 Open: 0.00241 Close: 0.00241 Low: 0.00241 High: 0.00241
2020-04-04 Open: 0.00241 Close: 0.00241 Low: 0.00241 High: 0.00241
2020-04-03 Open: 0.00241 Close: 0.00241 Low: 0.00241 High: 0.00241
2020-04-02 Open: 0.00241 Close: 0.00241 Low: 0.00241 High: 0.00241
2020-04-01 Open: 0.00239 Close: 0.00241 Low: 0.00234 High: 0.00241
2020-03-31 Open: 0.00244 Close: 0.00239 Low: 0.00239 High: 0.00244
2020-03-30 Open: 0.00244 Close: 0.00244 Low: 0.00244 High: 0.00244
2020-03-29 Open: 0.00244 Close: 0.00244 Low: 0.00244 High: 0.00244
2020-03-28 Open: 0.00244 Close: 0.00244 Low: 0.00244 High: 0.00244
2020-03-27 Open: 0.00244 Close: 0.00244 Low: 0.00244 High: 0.00244
2020-03-26 Open: 0.00244 Close: 0.00244 Low: 0.00244 High: 0.00244
2020-03-25 Open: 0.00244 Close: 0.00244 Low: 0.00244 High: 0.00244

Zinc (ZINC) Forecast Earnings Growth

Zinc (ZINC) Cryptocurrency Market info

ZINC (ZINC) Price Prediction, Forecast for next months and years

ZINC price predictions by tech sector

Comparison 2021 2022 2023 2024 2025
Facebook 2021: 0.0133 2022: 0.0289 2023: 0.121 2024: 0.241 2025: 0.844
Google 2021: 0.00723 2022: 0.01098 2023: 0.0163 2024: 0.0230 2025: 0.0375
Smartphone 2021: 0.00430 2022: 0.00551 2023: 0.00689 2024: 0.00861 2025: 0.0155
Internet users 2021: 0.00542 2022: 0.01054 2023: 0.0221 2024: 0.0374 2025: 0.0458
Paypal 2021: 0.00482 2022: 0.00723 2023: 0.0121 2024: 0.0169 2025: 0.0217
Data increase 2021: 0.00386 2022: 0.00482 2023: 0.00723 2024: 0.00964 2025: 0.0121

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Precious metals investment terms A to Z

Short Selling (also known as “going short” or simply “shorting”) is a way of profiting on lower prices. It’s the practice of selling borrowed (from the broker) assets, with the aim to buy them back later and return to the lender. Short sellers assume that they will be able to buy the stock back at a lower price than they sold short and thus profit.

Eric asks:

Eric visits John.

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John, the Trader

Eric, the Beginner

John, the Trader

Eric, the Beginner

John, the Trader

Eric, the Beginner

John, the Trader

Eric, the Beginner

John, the Trader

Eric, the Beginner

John, the Trader

Eric, the Beginner

John, the Trader

Eric, the Beginner

John, the Trader

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Eric, the Beginner

Gold Short Selling

The gold short seller profits if the price of the borrowed gold or security goes down – in this situation the investor is able to buy it (gold or other security) back at a lower price. The investor incurs losses if gold’s or this other security’s price goes up – the investor has to spend a bigger amount of money for the buyback. There is no limit to the losses that can be incurred while selling gold short (the price can theoretically rise infinitely), but the potential gain is limited (the price of gold or stock can fall to zero at the most). Going short may also refer to buying a derivative, where the investor profits from the fall in price of the underlying asset such as gold.

Naked Gold Short Selling

Naked short means selling short a security or some other asset like gold without having the asset. For instance, if you sell futures contracts for silver buy you don’t have silver to back up the position. If you had that silver, your losses on the futures contract would be offset by gains on the physical metal. Therefore, this position would be called a hedged (or covered) short futures position. However, if you would sell a futures contract for silver without having silver in the first place, then this position would be purely speculative and since this contract would not be backed by any asset, the position would be called “naked”.

A Brief History of Short Selling

Legend has it that the practice of short selling was invented at the beginning of 17th century by Dutch merchant Isaac Le Maire. It has been a source of controversy and criticism ever since. Shorting East India Company stocks in the 18th century by the London-based banking house Neal, James, Fordyce and Down led to a major crisis, resulting in the collapse of the vast majority of private banks in Scotland and a huge liquidity crisis. Short selling is also responsible for magnifying the Dutch Tulip Crisis.

The term “short” has been used since the middle of the nineteenth century. Short sellers were blamed for the crash of 1929 and this led to the implementation of laws governing short selling. In 1949 a fund that bought some stocks while selling others short hedged some of the market risk – this was the beginning of hedge funds.

Risks of Short Selling

  • No dividend or interest income – contrary to going long, return is taxed only as a capital gain.
  • Limited potential gains, unlimited potential losses – the price of a security can decrease at most to zero (100% potential profit, if going short), but it can increase theoretically infinitely (in this case potential loss of going short is unlimited).
  • A stockbroker may cover (end) a position if the price of the underlying stock rockets without the knowledge of a client in order to guarantee returning borrowed stock.
  • When the stock price rises, some investors who went short decide to cover their positions by buying back stocks thus fueling further price increase.
  • A stock may be “hard to borrow” – a stockbroker may charge an additional “hard to borrow” fee for every day the Securities and Exchange Commission (SEC) declares that the stock is “hard to borrow”.
  • The stockbroker requires a margin account and charges interest, in order to limit the credit risk.

Costs of Going Short

  • Fee for delivering the borrowed stocks – usually it is a commission similar to that of buying a stock.
  • All the dividends are paid to the lender from the account of the person going short.
  • For some brokers the investor going short does not earn interest on the proceeds from short sale.

Buying a Put Option

A very convenient way of going short is by buying a put option, as it limits the short’s potential loss. It is a contract between two parties to exchange some specified asset at a specified price by (in the case of an American option) or on (in the case of a European option) a specified date. The buyer of the put option has the right, but not the obligation, to sell the asset at this specified price and the seller has to buy this asset, if the buyer sells it. If the spot price at the specified future date is significantly lower than the strike of the option, buyers of the options make a profit – they have the right to sell the asset at a price higher than the market price.

We hope you enjoyed reading the above definition of gold short selling. If you’d like to learn more about gold in particular about its most recent price swings and their implications (is it a good time to short gold?), we invite you to sign up for our gold newsletter. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today .

Put Options

A derivative that provides you with leverage during downtrends, while limiting your risk. The catch is that you have to be right on time.

Short-term Trades

Short-term trades are trades that terminate within a short period from their inception. They can be very profitable, but they are also very risky.

Trend

Trend is the general direction – up, down or sideways – in which the price of an asset is heading for a prolonged period of time.

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Classroom | What is short-selling and how can I profit from a fall in stock prices? (Equity: Part 10)

Short-selling can be a risky but a profitable venture.

Part 10 of the Classroom deals with short-selling and explains how traders who have a negative view on stock can profit from a fall in its prices.

Whenever the market is falling, I hear about the term short-selling and short-sellers. Can you explain these terms?

Just like investors buy shares of a good company with the expectation that the price will go up in future, there is a category of market participants who may believe that the share price will fall in future. This could be either due to their negative view on the market or on the company. They could try to profit from this view by acting in a manner called as short selling. In this, the investor sells a stock today (at a higher price) and buys it in future (when the price falls in line with their expectation).

Please note that the selling can be done even if you don’t own the shares and hence the nomenclature ‘short’ indicating that you are short of these shares or that you don’t own them – still, you are selling.

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Traders who short sell shares are known as short sellers. In market parlance, they are also called bears.

Is short selling a riskier strategy compared to the conventional method of buying first and selling later?

Yes, the risks involved are higher because if the price rises instead of falling, then technically, your losses can be infinite. Whereas, when you are buying, your loss is limited to the value of purchases even if theoretically the price goes down all the way to zero. If you short sold a share at Rs 50 and the price rose to 500 for whatever reason, you are staring at a loss of Rs 450. But when you buy a stock for Rs 50, at worst you will lose Rs 50 if the stock price falls to 0, or stops trading altogether.

How can I short sell shares?

One can short sell shares by either using the derivative (futures and option) route or by using the Stock Lending and Borrowing Mechanism (SLBM). When you are short selling through the derivatives route, you don’t need to own the shares at the time of selling. In SLBM, you can borrow shares from somebody who owns them, and then sell those shares. Of course, there will be a cost for borrowing those shares and you will have to return the shares within a specified deadline.

Do I have to keep margin money with my broker when I am short selling shares?

How does one identify shares that can be short sold?

You need to identify stocks where either the overall business conditions or the individual performance will most likely deteriorate going forward. Stocks, where the prices are rising without any corresponding improvement in operating performance, are ideal candidates for short selling.

But remember, just because a stock is overvalued does not mean that you will be able to make money by short-selling it. Sometimes an entire sector can be overvalued because the market has taken a fancy to it. When that happens, every single stock in that sector, irrespective of its fundamentals, will do well. This was seen during the technology rally in the late 90s, when stocks from the media, telecom and IT services sectors rose to unbelievable highs. Short sellers lost money for a long time before they were eventually proved right.

Then there are cases where promoters collude with stock manipulators and manage to keep the stock price high for a long time though the fundamentals don’t justify the price.

As John Maynard Keynes reportedly remarked: “Markets can stay irrational longer than you can remain solvent.”

What is short covering?

Buying the shares back after short selling them is called short covering. Basically, you are covering those shares in which you were ‘short’ means you did not own them at the time of selling.

When too many short sellers try to cover their short positions at the same time, it can spark a rally in that stock.

Another set of market participants might often try to ‘squeeze’ short sellers by pushing up the stock price. These market participants could be existing shareholders, promoters, management or some other market manipulators.

The strategy—also known as short squeeze—is to create panic among short sellers so that all of them rush to cover their short positions at the same time.

Part 3: Long or Short ? Order Types And Calculating Profits & Losses

Going long, Going short, Order types, and Calculating Profit & Loss

• Buying and selling

The basic idea of trading the markets is to buy low and sell high or sell high and buy low. I know that probably sounds a little weird to you because you are probably thinking “how can I sell something that I don’t own?” Well, in the Forex market when you sell a currency pair you are actually buying the quote currency (the second currency in the pair) and selling the base currency (the first currency in the pair).

In the case of a non-Forex example though, selling short seems a little confusing, like if you were to sell a stock or commodity. The basic idea here is that your broker lends you the stock or commodity to sell and then you must buy it back later to close the transaction. Essentially, since there is no physical delivery it is possible to sell a security with your broker since you will ‘give’ it back to them at a later date, hopefully at a lower price.

• Long vs. Short

Another great thing about the Forex market is that you have more of a potential to profit in both rising and falling markets due to the fact that there is no market bias like the bullish bias of stocks. Anyone who has traded for a while knows that the fastest money is made in falling markets, so if you learn to trade both bull and bear markets you will have plenty of opportunities to profit.

LONG – When we go long it means we are buying the market and so we want the market to rise so that we can then sell back our position at a higher price than we bought for. This means we are buying the first currency in the pair and selling the second. So, if we buy the EURUSD and the euro strengthens relative to the U.S. dollar, we will be in a profitable trade.

SHORT – When we go short it means we are selling the market and so we want the market to fall so that we can then buy back our position at a lower price than we sold it for. This means we are selling the first currency in the pair and buying the second. So, if we sell the GBPUSD and the British pound weakens relative to the U.S. dollar, we will be in a profitable trade.
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• Order types

Now it’s time to cover order types. When you execute a trade in the Forex market it is called an ‘order’, there are different order types and they can vary between brokers. All brokers provide some basic order types, there are other ‘special’ order types that are not offered by all brokers though, and we will cover them all below:

Market order – A market order is an order that is placed ‘at the market’ and it’s executed instantly at the best available price.

Limit Entry order – A limit entry order is placed to either buy below the current market price or sell above the current market price. This is a bit tricky to understand at first so let me explain:

If the EURUSD is currently trading at 1.3200 and you want to go sell the market if it reaches 1.3250, you can place a limit sell order and then when / if the market touches 1.3250 it will fill you short. Thus, the limit sell order is placed ABOVE current market price. If you want to buy the EURUSD at 1.3050 and the market is trading at 1.3100, you would place your limit buy order at 1.3050 and then if the market hits that level it will fill you long. Thus the limit buy order is placed BELOW current market price.

Stop Entry order – A stop-entry order is placed to buy above the current market price or sell below it. For example, if you want to trade long but you want to enter on a breakout of a resistance area, you would place your buy stop just above the resistance and you would get filled as price moves up into your stop entry order. The opposite holds true for a sell-stop entry if you want to sell the market.

Stop Loss order – A stop-loss order is an order that is connected to a trade for the purpose of preventing further losses if the price moves beyond a level that you specify. The stop-loss is perhaps the most important order in Forex trading since it gives you the ability to control your risk and limit losses. This order remains in effect until the position is liquidated or you modify or cancel the stop-loss order.

Trailing Stop – The trailing stop-loss order is an order that is connected to a trade like the standard stop-loss, but a trailing stop-loss moves or ‘trails’ the current market price as your trade moves in your favor. You can typically set your trailing stop-loss to trail at a certain distance from current market price, it will not start moving until or unless the price moves greater than the distance you specify. For example, if you set a 50 pip trailing stop on the EURUSD, the stop will not move up until your position is in your favor by 51 pips, and then the stop will only move again if the market moves 51 pips above where your trailing stop is, so this way you can lock in profit as the market moves in your favor while still giving the trade room to grow and breath. Trailing stops are best used in strong trending markets.

Good till Cancelled order (GTC) – A good till cancelled order is exactly what it says…good until you cancel it. If you place a GTC order it will not expire until you manually cancel it. Be careful with these because you don’t want to set a GTC and then forget about it only to have the market fill you a month later in a potentially unfavorable position.

Good for the Day order (GFD) – A good for day order remains active in the market until the end of the trading day, in Forex the trading day ends at 5:00pm EST or New York time. The exact time a GFD expires might vary from broker to broker, so always check with your broker.

One Cancels the Other order (OCO) – A one cancels the other order is essentially two sets of orders; it can consist of two entry orders, two stop loss orders, or two entry and two stop-loss orders. Essentially, when one order is executed the other is cancelled. So, if you want to buy OR sell the EURUSD because you are anticipating a breakout from consolidation but you don’t know which way the market will break, you can place a buy entry and stop-loss above the consolidation and a sell entry with stop-loss below the consolidation. If the buy entry gets filled for example, the sell entry and its connected stop loss will both be cancelled instantly. A very handy order to use when you are not sure which direction the market will move but are anticipating a large move.

One Triggers the Other order (OTO) – This order is the opposite of an OCO order, because instead of cancelling an order upon filling one, it will trigger another order upon filling one.

• Lot size / Contract size

In Forex, positions are quoted in terms of ‘lots’. The common nomenclature is ‘standard lot’, ‘mini lot’, ‘micro lot’, and ‘nano lot’; we can see examples of each of these in the chart below and the number of units they each represent:

• How to calculate pip value

You probably already know that currencies are measured in pips, and one pip is the smallest increment of price movement that a currency can move. To make money from these small increments of price movement, you need to trade larger amounts of a particular currency in order to see any significant gain (or loss). This is where leverage comes into play; if you don’t understand leverage totally please go read Part 1 of the course where we discuss it.

So we need to know now how lot size affects the value of one pip. Let’s work through a couple examples:

We will assume we are using standard lots, which control 100,000 units per lot. Let’s see how this affects pip value.

1) EUR/JPY at an exchange rate of 100.50 (.01 / 100.50) x 100,000 = $9.95 per pip

2) USD/CHF at an exchange rate of 0.9190 (.0001 / .9190) x 100,000 = $10.88 per pip

In currency pairs where the U.S. dollar is the quote currency, one standard lot will always equal $10 per pip, one mini-lot will equal $1 per pip, one micro-lost will equal .10 cents per pip, and a nano-lot is one penny per pip.

• How to calculate profit and loss

Now, let’s move on to calculating profit and loss:

Let’s use a pair without the U.S. dollar as the quote currency since these are the trickier ones:

1) The rate for the USD/CHF is currently quoted at 0.9191 / 0.9195. Let’s say we are looking to sell the USD/CHF, this means we will be working with the ‘bid’ price of 0.9191, or the rate at which the market is prepared to buy from you.

2) You then sell 1 standard lot (100,000 units) at 0.9191

3) A couple of days later the price moves to 0.9091 / 0.9095 and you decide to take your profit of 96 pips, but what dollar amount is that??

4) The new quote price for the USD/CHF is 0.9091 / 0.9095. Since you are now closing the trade you are working with the ‘ask’ price since you are going to buy the currency pair to offset the sell order you previously initiated. So, since the ‘ask’ price is now 0.9095, this is the price the market is willing to sell the currency pair to you, or the price that you can buy it back at (since you initially sold it).

5) The difference between the price you sold at (0.9191) and the price you want to buy back at (0.9095) is 0.0096, or 96 pips.

6) Using the formula from above, we now have (.0001 / 0.9095) x 100,000 = $10.99 per pip x 96 pips = $1055.04

For currency pairs where the U.S. dollar is the quote currency, calculating profit or loss is pretty simple really. You simply take the number of pips you gained or lost and multiple that by the dollar per pip you are trading, here’s an example:

Let’s say you trade the EURUSD and you buy it at 1.3200 but the price moves down and hits your stop at 1.3100….you just lost 100 pips.

If you are trading 1 standard lot you would have lost $1,000 because 1 standard lot of pairs with the U.S. dollars as the quote currency = $10 per pip, and $10 per pip x 100 pips = $1,000

If you had traded 1 mini-lot you would have lost $100 since 1 mini-lot of USD quote pairs is equal to $1 per pip and $1 x 100 pips = $100

Always remember: when you enter or exit a trade you have to deal with the spread of the bid/ask price. Thus, when you buy a currency you will use the ask price and when you sell a currency you use the bid price.

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