What is down -34% in stock terms?
"The sentence is mathematically wrong and verbally unclear. Mathematically, you calculate the downwards percentage by So, it should be Verbally, the reporter should have written ""The stock is down by 25%"", not ""down by -25%""."
Only on an accounting basis. The moment they start selling, it would plunge. Take a look at all the small float tech IPOs. Big pop, but once the lockup period ends, it drops 50% as insiders sell. In the end, fundamentals will rule. Facebook managed to unload a quarter of the company at the vastly inflated $38, which is very impressive. The other tech IPOs typically sell less than 10%, because selling more would lead to very low share prices. Remember, these guys are not retail investors selling 100 shares. The ticker shows the price of the last block of shares that was traded, but when someone tries to sell a couple million shares, then it will plunge. I don't have a direct short position. It is a structured product linked to the performance of Tesla. I basically get a fixed coupon payment every quater and as long as Tesla doesn't move up more than 50% in the next half year I get my initial investment back plus the coupons. If it should move up more than 50% I lose that percentage of my initial investment I do not fully understand the transactions involved, but it appears that there was a reverse stock split (20:1) and some legal status change as well on June 29th. This seems to be the cause for the change in valuation of the stock as the dates match the drop. https://www.otcmarkets.com/stock/RMSLD/filings "You have heard the old adage ""Buy low, sell high"", right? That sounds so obvious that you'd have to wonder why they would ever bother coining such an expression. It should rank up there with ""Don't walk in front of a moving car"" on the Duh scale of advice. Well, your question demonstrates exactly why it isn't quite so obvious in the real world and that people need to be reminded of it.  So, in your example, the stock prices are currently low (relative to what they have been). So per that adage, do you sell or buy when prices are low? Hint: It isn't sell. Yes. Your gut is going to tell you the exact opposite thanks to the fact that our brains are unfortunately wired to make us susceptible to the loss aversion fallacy. When the market has undergone a big drop is the WORST time to stop contributing (buying stocks).  This example might help get your brain and gut to agree a little more easily: If you were talking about any other non-investment commodity, cars for instance.  Your question equates to.. I really need a car, but the prices have been dropping like crazy lately.    Maybe I should wait until the car dealers start raising their prices again before I buy one. Dollar Cost Averaging As littleadv suggested, if you have an automatic payroll deduction for your retirement account, you are getting the benefit of Dollar Cost Averaging. Because you are investing the same amount on a scheduled interval, you are buying more shares when they are cheap and fewer when they are expensive. It is like an automatic buy low strategy is built into the account. The alternative, which you are implying, is a market timing strategy. Under this strategy, instead of investing regularly you try to get in and out of investments right before they go up/drop. There are two MAJOR flaws with this approach:   1) Your brain will work against you (see above) and encourage you to do the exact opposite of what you should be doing.   2) Unless you are clairvoyant, this strategy isn't much better than gambling. If you are lucky it can work, but because of #1, the odds are stacked against you." This is a gross simplification as there are a few different ways to do this. The principle overall is the same though. To short a stock, you borrow X shares from a third party and sell them at the current price. You now owe the lender X shares but have the proceeds from the sale. If the share price falls you can buy back those shares at the new lower price, return them to the lender and pocket the difference. The risk comes when the share price goes the other way, you now owe the lender the new value of the shares, so have to find some way to cover the difference. This happened a while back when Porsche made a fortune buying shares in Volkswagen from short sellers, and the price unexpectedly rose. Consider trailing stop losses maybe 5% below your profit target, if you want a simplistic answer. Roll it into another put with a lower strike and hope it keeps going down.  At the very least it will defray the cost of the long position.  Ps I think you're looking for the word hedge not lever. Personally, I have been in that situation too often that now I am selling at the first tick down! (not exactly but you get the idea..) I have learned over the years to not fall in love with any stock, and this is a very hard thing to do. Limit your losses and take profit when you are satisfied with them. Nothing prevents you from buying back in this stock but why buying when it is going down?   Just my 2 cents. The dividend is for a quarter of the year, three months. 80 cents is 3.9% of $20.51. Presumably the Div/yield changes as the stock price changes. On Yahoo, they specify that the yield is based on a particular stated date. So it's only the exact number if the stock trades at the price on that date. You should be worried. You have made the mistake of entering an investment on the recommendation of family/friend. The last think you should do is make another mistake of just leaving it and hoping it will go up again. Your stock has dropped 37.6% from its high of $74.50. That means it has to go up over 60% just to reach the high of $74.50. You are correct this may never happen or if it does it could take a long, long time to get up to its previous highs. What is the company doing to turn its fortunes around? Take a look at some other examples: QAN.AX - Qantas Airways  This stock reached a high of around $6 in late 2007 after a nice uptrend over a year and a half, it then dropped drastically at the start of the GFC, and has since kept falling and is now priced at just $1.15. QAN reported its first ever loss earlier this year, but its problems were evident much earlier. AAPL - Apple Inc.  AAPL reach a high of just over $700 in September 2013, then dropped to around $400 and has recovered a bit to about $525 (still 25% below its highs) and looks to be at the start of another downtrend. How long will it take AAPL to get back to $700, more than 33% from its current price? TEN.AX - Ten Network Holdings Limited  TEN reached a high of $4.26 in late 2004 after a nice uptrend during 2004. It then started a steep journey downwards and is still going down. It is now priced at just $0.25, a whopping 94% below its high. It will have to increase by 1600% just to reach its high of $4.26 (which I think will never happen). Can a stock come back from a drastic downtrend? Yes it can. It doesn't always happen, but a company can turn around and can reach and even surpass it previous highs. The question is how and when will this happen? How long will you keep your capital tied up in a stock that is going nowhere and has every chance of going further down? The most important thing with any investment is to protect your current capital. If you lose all your capital you cannot make any new investments until you build up more capital. That is why it is so important to have a risk management strategy and decide what is your get out point if things go against you before you get into any new investment. Have a stop loss. I would get out of your investment before you lose more capital. If you had set a stop loss at 20% off the stock's last highs, you would have gotten out at about $59.60, 28% higher than the current share price of $46.50. If you do further analysis on this company and find that it is improving its prospects and the stock price breaks up through its current ranging band, then you can always buy back in. However, do you still want to be in the stock if it breaks the range band on the downside? In this case who knows how low it can continue to go. N.B. This is my opinion, as others would have theirs, and what I would do in your current situation with this stock. I watched FRAN drop 50% when their CEO resigned a year or so ago. From 20 a share to 10. Took a year to fully recover and then slid to below 10. Of course they are getting slaughtered with the rest of retail. The time when you might want to do this is if you think BBY is undervalued already.  If you'd be happy buying the stock now, you'd be happy buying it lower (at the strike price of the put option you sold).  If the stock doesn't go down, you win.  If it does, you still win, because you get the stock at the strike price. If I recall correctly Warren Buffett did this with Coca-Cola.  But that's Warren Buffett. "I didn't downvote but I will disagree wholeheartedly with your 75% decline analogy. That's like a palm reader predicting that someone is going to die. Well no shit, I'm sure someone is, somewhere, at some point. Or an analyst saying a stock will drop because of A, but it actually drops because of B, and you say ""See! I told you it was going to drop!"". All you're doing at that point is throwing something at a wall and hoping it sticks." "First, I would like to use a better chart.  In my opinion, a close of day line chart obscures a lot of important information.  Here is a daily OHLC log chart:  The initial drop from the 1099.23 close on Oct 3 was to 839.8 intraday, to close at 899.22 on Oct 10.  After this the market was still very volatile and reached a low of 747.78 on Nov 20, closing only slightly higher than this.  It traded as high as 934.70 on Jan 6, 2009, but the whole period of Nov 24 - Feb 13 was somewhat of a trading range of roughly 800-900.  Despite this, the news reports of the time were frequently saying things like ""this isn't going to be a V shaped recovery, it is going to be U shaped.""  The roughly one week dip you see Feb 27 - Mar 9 taking it to an intraday low of 666.79 (only about 11% below the previous low) on first glance appears to be just a continuation of the previous trend.   However... The Mar 10 uptrend started with various news articles (such as this one) which I recall at the time suggested things like reinstating the parts of the Glass–Steagall Act of 1933 which had been repealed by the Gramm–Leach–Bliley Act.  Although these attempts appear to have been unsuccessful, the widespread telegraphing of such attempts in the media seemed to have reversed a common notion which I saw widespread on forums and other places that, ""we are going to be in this mess forever, the market has nowhere to go but down, and therefore shorting the market is a good idea now.""  I don't find the article itself, but one prominent theme was the ""up-tick"" rule on short selling: source From this viewpoint, then, that the last dip was driven not so much by a recognition that the economy was really in the toilet (as this really was discounted in the first drop and at least by late November had already been figured into the price).  Instead, it was sort of the opposite of a market top, where now you started seeing individual investors jump on the band-wagon and decide that now was the time for a foray into selling (short).  The fact that the up-tick rule was likely to be re-instated had a noticeable effect on halting the final slide." If you believe the stock market will be down 20-30% in the next few months, sell your stock holdings, buy a protective put option for the value of the holdings that you want to keep. That would be hedging against it. Anything more is speculating that the market will fall.