Most people think that stock index futures can only be profitable if they go up, and shorting is another way to make profits. Short selling is a trading behavior that investors predict the decline of stock index futures, then sell at a high price and buy at a low price. Specifically, investors expect the stock index futures to fall, so they borrow shares to sell when the stock index futures are high, and wait until the price falls to a certain extent agreed in advance before buying them back, thus earning the bid-ask difference, while investors don't actually own the stocks.
Will short selling have a great impact on the stock index futures market?
Shorting stock index futures will have a great impact on the stock index futures market. The emergence of short selling mechanism provides a position for the stock index futures market to hedge investment risks. In the past, China stock market was dominated by "one-sided market", and investors invested in rising stocks in succession. The purpose of setting up short selling mechanism is to keep the relative balance between stock value and price.