%0 Journal Article %A Bruce I. Jacobs %T Momentum Trading %B The New Alchemy %D 2000 %R 10.3905/joi.2000.319434 %J The Journal of Investing %P 6-8 %V 9 %N 4 %X Momentum traders buy stock (often on margin) as prices rise and sell as prices fall. In essence, they are trying to obtain the benefits of a call option--upside participation with limited risk on the downside--without any payment of an option premium. The strategy appears to offer a chance of huge gains with little risk and minimal cost, but its real risks and costs become known only when it's too late--after the strategy has failed, and taken markets down with it. %U https://joi.pm-research.com/content/iijinvest/9/4/6.full.pdf