What does double down mean in stocks?

If you’re looking for a great way to increase your portfolio’s returns without much risk, then the option of investing in stocks that offer a double-digit potential return is a great one. But for investors who don’t want to take on more risk, the idea of doubling down on a stock when it trades at a lower price than its initial offering price may sound intimidating.

What is the meaning of double down in stocks?

When you double down in stocks, you make more of a commitment to the market by increasing your investment. If you were previously investing $200 in a mutual fund and doubled down, you would now have $400 invested in that mutual fund. If the mutual fund's value drops by 10 percent, you would lose $40, and on the other hand, if the mutual fund's value increased by 10 percent, you would end up with $400 more than what you had before.

What does double down mean in stock market?

When a person bets on a stock, it’s usually a short-term investment. If you’re not confident that the price will rise, you can sell your position to someone who thinks the price will rise and earn a profit. But if you’re confident that the price will rise, you can buy more shares and increase your profit. But you can only do so if there are still shares available at a lower price.

What does double down mean in stocks and bonds?

At first glance, the concept of double down may sound like some kind of gambling game. In fact, it's a popular option for betting on certain outcomes, as we'll see in a moment. But to understand the true meaning of double down, you need to look at the stock market. If you want to practice the trade yourself, you can use virtual stock market websites to practice.

What does double down mean in stocks trading?

When you make a successful trade in stocks, you can increase the amount of money you make by “doubling down”. This simply means that you reinvest your profits. You don’t simply cash out and take your profit. Instead, you reinvest it back into the same stock. Another option is you can buy more shares. This is called “buying in” or “bull dogging”.