When can you earn more by selling a losing security and buying it back at lower price?

External question — Personal Finance Stack Exchange Author: user10763 Original post: https://money.stackexchange.com/questions/124068 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. My goal is just to maximize capital gain on stocks and options, regardless of Wash Sale Rule or tax. My grandparents live in Canada. I'm not trying to sell to minimize taxes. I quote one example below. [u/WillTradeBTCforPizza comments at the top.] The volume says the earliest he could have bought these was on Friday 7/5 or Monday 7/8, when they were trading from $2.36-$0.98. They closed at $.06 yesterday. ​ So in about a week he vaporized $7k, had the balls let them go to expiration, and in a freak miracle earns 1/5 of a million dollars. [ u/randominternetguy3 asks ] Rather than riding down and back up, wouldn't the smarter move be to pick them up for \$300 at the bottom? Shit, he could have doubled down and made \$400k lmao [u/prodoubt] Yes. But no one would ever cut losses and then reinvest into that same strike - unless they knew something. This is why the SEC won’t invrstigate further if they even look at this. This is truly just the luckiest shit ever happening to someone who fucked up days ago not cutting losses at 40 or even 70% down. [u/randominternetguy3] Right. But that's kind of the point - if you're willing to ride it to zero, shouldn't you also be willing to double down? [u/prodoubt] Which is why I said he would only do that if he actually knew something. Or maybe he was playing 5D space chess and his plan all along was to make this look like he is stupid af by not cutting losses, but deep down knew his lotto was coming. I am going to wager on dumb luck.

External answer — Personal Finance Stack Exchange Author: D Stanley Original post: https://money.stackexchange.com/a/124070 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. To take your question literally, you can profit by selling when 1) the stock continues to drop and 2) the stock rises after you re-buy. Neither of those are guaranteed. What you've posted is some "random internet guy" on Reddit saying you should have bought when it hit the bottom. Profound hindsight... The problem is that you don't know what the bottom is to know when to buy.