1, balance the stock market price. Long and short traders take risks in pursuit of profits, and their trading behavior is usually the opposite of that of ordinary investors. When the price of a stock falls in the market, ordinary investors usually sell the stock to avoid losses caused by further price decline, while long traders buy a large number of stocks at low prices.
Therefore, the market demand for the stock has increased, thus preventing the stock price from falling further. On the contrary, when the stock market rises, ordinary investors usually buy stocks, while short sellers sell them in large quantities. As a result of their heavy selling, the stock supply in the market has increased, thus improving the inhibitory effect on the continuous rise of stock prices.
2. Expand the trading scale of the stock market. In long trading and short trading, traders buy and sell with the changes of the stock market, which objectively increases the number of transactions and the number of traders.
Due to the introduction of credit mechanism, they can buy a large number of stocks in the market with little margin or borrow a large number of stocks to sell in the market, thus providing them with opportunities to obtain more profits. This also stimulated the public's interest in securities trading, thus expanding the breadth and depth of the market.
3. The change of stock price is determined by the strength contrast between bulls and bears. The bulls will predict the price increase and make a purchase decision. Bears will sell their shares because they predict that prices will fall. Like other transactions, when the bulls and bears agree on the price, the transaction is reached.
Extended data:
Types of short trades in futures double opening;
1, pure speculative short trading. Traders do not own specific stocks themselves, but borrow stocks directly from others or through their securities companies for delivery. The purpose of its transaction is purely to obtain the difference income.
2. Arbitrage short selling. Traders borrow from the lower-priced market by taking advantage of the price difference between local stock markets, and then sell them in the higher-priced market, and then buy them back when the price falls, so as to obtain the profit of the price difference.
3. Short selling in the background of safe deposit box. Its basic feature is that traders own stocks engaged in short selling, but they still borrow the same stocks from other sources for delivery. There are three situations:
(1) One is that traders have their own stocks, but these stocks are placed in the safe deposit box of the bank or other special custody institutions, and it is not easy to take them out for a while. In order to seize the trading opportunity, they borrow money from other channels first and then make up later;
(2) The second is that the trader owns his own shares, but in order to postpone the tax payment of the current year, he sells the shares at the end of the year (generally in 65438+February) and buys them back immediately in the second year of 65438+ 10, thus delaying the tax payable to the next year;
(3) The third is that traders own a variety of stocks. When he estimated that one of the stocks was bearish, he shorted the stock and borrowed the same stock from other places for delivery. If the market price does fall, he can use the profit as a short position to offset the losses of other stocks. And if the market price does not fall as expected, he can use the profits of other stocks to offset the losses of short trading.
4. Hedge short selling. Traders hold excess positions in stocks, that is, they buy more than they sell and are in an "overbought" state.
Baidu encyclopedia-futures double opening
Baidu Encyclopedia-Long Trading
Baidu encyclopedia-short position
Baidu Encyclopedia-Short Trading