The sound of a hard return and the sight of a soft return are often used interchangeably in website design. However, they are quite different. Learn deep in this article what these returns mean and why they are important.
When a trader makes a hard return, they are buying a security and selling the same security at the same price within one trading day. This is considered a quick move and often shows an impulse to sell. When a trader makes a soft return, they are buying a security and selling the same security at a different price within one trading day. This is considered a slow move and often shows an impulse to buy.
What is Hard Return?
Hard return is when you sell stock and then buy it back at a lower price. Hard return is considered a positive move because it means that you are making money on your investment.
What is Soft Return?
A soft return is a return of a security that has not had its price increased by at least the amount of the original investment. A hard return is a return of a security that has had its price increased by at least the amount of the original investment.
Practical Application of the Soft Return
A hard return is when a trader sells an asset and then buys the same asset back at a lower price. This is considered a sell-off and is often seen as a negative event because it suggests that the trader is selling the asset too cheaply. A soft return, on the other hand, is when a trader buys an asset back at a higher price than they sold it. This is considered a buy-back and is seen as a positive event because it shows that the trader is buying the asset too expensively.
Both hard and soft returns can be useful in determining how much of an asset to buy or sell. For example, if a trader believes that the price of an asset will go up in the near future, they may want to sell it and wait for the price to rise before buying it back. If they believe that the price of the asset will go down, they may want to buy it back before it falls too low. Hard returns show whether or not this predicted change in price has occurred, while soft returns show whether or not the trader was correct in their prediction.
Conclusion
If you’ve ever made a purchase and then had second thoughts about it, you’re not alone. Many of us have returned items in the past, whether we changed our mind or the product just wasn’t what we were looking for. In either case, returning an item is usually a pretty simple process: all you need to do is take the item back to where you bought it and exchange it for something else.
But what about those situations where you don’t want to return the product? Maybe you tried it on and it didn’t fit well or maybe you just don’t like it. In these cases, there are two different types of returns that can happen: hard and soft.
