Question

A contrarian trader: A. Buys winners and sells losers B. Buys small firms and sells large...

A contrarian trader:

A.

Buys winners and sells losers
B.

Buys small firms and sells large firms
C.

Buys losers and sells winners
D.

Buys large firms and sells small firms
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Answer #1

The correct option is C

A contrarion trader refers to a trader who has different view point than the market, when the market is going downward or the price is falling then he buys the losers in a view that it will give higher returns and he sells the winner when other are buying.

It is because contrarion trader thinks that when the other investors are buying it means they have invested their all the money which means the market is at peak and it can't grow further, at this point contrarion trader already has sold the winner.

Therefore, correct option is C

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