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Lost money in stocks? Here's what to do now

Stop. Don't trade today. Then find out how big the loss really is, learn the math of getting back, and write a plan before your next move.

Beginner guide · 12-minute read · Updated 2026-10-28

First, the next 24 hours

You lost money. Maybe a little, maybe a lot. Your chest is tight and your head is loud. That's normal. Almost everyone who has ever owned a stock has felt this.

Here's the short answer: don't make a big move today. No selling everything. No buying more. No new trades to "fix it". A loss is a bad time to decide anything, because fear and hurt make the choice for you.

Do these five things instead, in this order:

1. Close the app. Watching the number won't change it. It only makes the next choice worse.
2. Write the number down. What did you put in? What is it worth now? Seeing it on paper makes it smaller than it feels.
3. Check if you still need that money soon. Rent, bills, a car payment? That answer matters more than anything on a chart.
4. Sleep on it. One night. The stock will still be there tomorrow, and so will your choices.
5. Then read the rest of this page and pick your situation below.

Is the loss real yet? Paper loss vs locked-in loss

There are two kinds of loss, and they work differently.

A Paper loss is a loss on a stock you still own. The screen says you're down, but you haven't sold. A locked-in loss happens when you sell. Then the money is gone from that stock for good.

Neither one is "better". Holding isn't brave and selling isn't weak. The question is which one fits your plan, and most people who are hurting don't have a plan yet. That's what the rest of this page is for.

One tax note. A locked-in loss in a regular taxable account can often offset gains, but buying the same stock back too soon can cancel that. See Wash sale (options) for the US rule and the superficial loss rule for Canada. A loss inside an IRA, TFSA or RRSP doesn't cut your tax bill at all. Check the IRS or the CRA for your own case.

The math of getting back

This is the part nobody tells you. A loss and the gain that undoes it are not the same size.

If a stock falls 50%, it doesn't need to rise 50% to get you back. It needs to rise 100%. It has to double. That's because the gain is measured from the smaller number.

Try your own numbers in the loss recovery calculator. It takes ten seconds and it changes how you think about risk forever.

A worked example (hypothetical): how a loss turns into a bigger one

Sam puts $10,000 into a made-up stock, XYZ, at $50 a share. That's 200 shares. XYZ falls to $30. Sam is down −$4,000. To get back, the $6,000 left needs to grow 67%.

Sam can't stand waiting. Sam sells and puts the $6,000 into a hot stock everyone is talking about, to "make it back faster". That stock falls 25%.

The first loss was painful. The second one did the real damage. The hole went from needing 67% to needing 122%, and it took one rushed choice to get there.

What not to do next

These are the moves that turn a bad week into a bad year. Each one feels smart in the moment.

• Revenge trading. Taking a new trade just to win the money back. The market doesn't know you lost. Read revenge trading for a 10-minute reset.
• Going bigger. Doubling your size to get back faster doubles how fast you can fall, too.
• Buying more just because it's cheaper. That's averaging down without a plan. Bought a stock at the top walks through the numbers.
• Jumping into options to catch up. Buying cheap options for a fast win is how many small accounts end at zero. If that already happened, read lost savings trading options.
• Using money you need. Rent money, emergency money or borrowed money turns every red day into fear.
• Selling in a panic at the low, then watching it bounce. See how to stop panic selling.
• Hiding it. Secrets grow. If you share money with someone, how to tell your spouse you lost money trading has a short script.

Find your situation

Every loss is a little different. Pick the one that sounds like you:

• "My stock is down half. Sell or hold?" Read stock down 50 percent, sell or hold. It has a simple test: would you buy it today?
• "I bought right at the top." Read bought a stock at the top. It covers why your buy price feels like a magic number, and why it isn't.
• "I keep selling when it drops." Read how to stop panic selling. It gives you a card to write on a calm day.
• "I already sold, and now it's going up." Read panic sold at the bottom. It shows how to get back in with a plan, not a chase.
• "I lost savings on options." Read lost savings trading options. Stop first, then sort it out.
• "I have to tell my partner." Read how to tell your spouse you lost money trading.

Write a one-page plan before your next trade

The single biggest change you can make is this: decide your rules on a calm day, and write them down. A rule you invent while scared is a guess. A rule you wrote last week is a plan.

Your page needs five lines:

1. How much of my money goes into one stock. Pick a cap. Write it down. Use the position size calculator if you trade.
2. The most I'll lose before I act. "If any stock falls 25% from my buy price, I review it within 24 hours." A Stop loss is the trader's version.
3. What I'll do then. Reread why I bought it. Ask: would I buy it today, at this price? If no, I sell. If yes, I hold, and I don't add.
4. The 24-hour rule. No big buy or sell on the same day as a big drop.
5. Where I log it. Every buy and sell, with one line on why and how I felt. See how to keep a trading journal.

Scared to start again? A slower way back

Some people lose money once and never invest again. That's a second loss, a quiet one. You don't have to rush back. But you can come back slowly, with smaller steps.

Spread it out. One stock can fall a lot. Many stocks rarely all fall together the same way. How many stocks should a beginner own lays out the choices, including one broad Index fund.

Buy in pieces, on a schedule. Dollar-cost averaging means putting in the same amount each month. It takes the "is today the right day?" stress away. It won't stop a fall, though. Broad markets have fallen and stayed down for years before, and single stocks can go to zero.

Get paid to wait. Some people come back by selling options on stocks they already own or would be happy to own. A Covered call collects a premium on shares you hold. A cash-secured put collects a premium while you wait to buy a stock at a lower price. Together they make the wheel strategy. The stock can still fall, so the share risk needs the same plan.

If you go that way, you'll need options approval from your broker:

• How to fill out an options application, honestly, field by field.
• What options level you need for covered calls, by broker.
• Options application denied? The common reasons and what to do.
• Selling options in retirement, if this is your nest egg.
• Can you trade options under 18?, if you're young and just starting.

In Canada, covered calls are widely allowed in a TFSA or RRSP, but cash-secured puts depend on the broker. Options permissions differ by broker everywhere.

Questions