What should you do when a stock liquidation occurs_Reasons for dealing with a stock liquidation

Do you need compensation for a stock liquidation? Perhaps many people think that compensation for a stock liquidation is very serious. ?The following is what the editor brings to you what to do when a stock liquidation occurs. I hope it can help you to a certain extent.

What to do when a stock liquidation occurs

When a stock liquidation occurs, investors can consider the following methods to deal with it:

Calm decision-making: facing In the event of a stock liquidation, you must first calm down and do not panic or make hasty decisions. Panic only exacerbates losses rather than solving problems.

Close the position and stop the loss: If you find that the stock price has dropped beyond the loss range you can bear, it is a common response to stop the loss and close the position in time. Set a reasonable stop loss point, and when the stock price hits or approaches the stop loss point, decisively close the position to avoid further losses.

Ask professionals: Seek advice and suggestions from professionals, such as stockbrokers, investment consultants, etc. They can help analyze the situation and provide appropriate relief measures.

Smooth return of capital: If investors believe that losses are only temporary, they can consider continuing to hold stocks, wait for the market to recover, and return capital as smoothly as possible. However, careful evaluation and risk control are required.

Main methods to deal with stock liquidation

Diversified investment: Add different asset classes and industries to the investment portfolio to achieve risk diversification. If one stock or industry loses money, other investments may still balance out the losses.

Insist on long-term investment: The stock market rises and falls, and short-term losses do not represent long-term performance. If you are confident in the fundamentals and prospects of the stock, you can consider holding it for a long time and wait for the market to recover.

Learn lessons: The experience of liquidation can serve as a lesson to help investors realize their own investment mistakes and shortcomings. Summarize experiences and lessons in a timely manner to improve investment decisions.

When dealing with stock liquidation, each investor's situation and approach may be different, depending on personal risk tolerance and investment goals. The important thing is to stay calm and choose the appropriate method to deal with stock liquidation based on your own situation. At the same time, investors should also fully understand the risks before investing and have preparations and plans to deal with them.

Do I need to compensate for stock liquidation?

Liquidation refers to the situation where the customer’s equity in the investor’s margin account becomes negative under certain special conditions. If the liquidation results in If the shortfall is caused by investors, investors need to make up the shortfall, otherwise they will face legal pressure.

Most of the reasons for liquidation are related to improper fund management. In order to avoid this situation, investors should strictly control their positions and manage their funds reasonably. For example, every time they buy, only Buy 1/10 of the position of your capital, and at the same time, set stop loss and stop profit points, and avoid full position operations like those that may occur in stock trading.

At the same time, the leverage of investors buying futures is also high, and the greater the risk of liquidation. For example, if Zhang San’s futures leverage is 10 times, the price of the underlying asset will fluctuate after he makes a wrong move. 10%, his loss rate will reach 100%, that is, his position will be liquidated; Li Si's futures leverage is 5 times, and after he makes the wrong move, the price of the underlying asset will have to fluctuate by 20% before Li Si's loss rate will reach 100% , that is, the position is liquidated.

What does liquidation mean?

Liquidation in the stock market usually occurs in securities lending transactions and stock index futures. This is a margin transaction that occurs in transactions in the stock market. In places where stocks fell in 2015, many accounts were liquidated. The liquidation of these accounts also intensified the market's downward trend. The reason why these securities lending accounts have been liquidated is because when there are major changes in the market, the vast majority of the funds of these investors are still in transactions. Once the transaction and the market trend are opposite, there is an opportunity. Liquidation. Once a liquidation occurs, the shortfall needs to be replenished to the securities company, otherwise it will face legal liability. This also shows that securities lending transactions involve risks in the stock market, so this business has very high requirements for investors' funds and risk tolerance.

Most investors who liquidated their positions suffered losses caused by overweight positions. The underlying reason was that they became eager for quick success and quick profits driven by the market conditions, no longer feared the market, and no longer had the fear of stock market risks. exist. Many investors who have successfully traded in the market have had their positions liquidated due to their inability to trade, causing their profits in the stock market to disappear.

Does a stock loss require a cover-up?

Whether a stock loss requires a cover-up depends on the situation. Generally, one needs to analyze the reasons for the stock loss and whether one has the ability to bear the risk. If This stock fell due to the bad general environment, and has fallen to a low level. The stock has begun to rebound. Investors have a strong risk tolerance and are in a light position, so they can consider covering their positions. .

Just note that covering a position will increase the risk of the stock. That is to say, if the judgment is wrong and the stock is still at a loss, then the money invested in covering the position will also be lost, so everyone is covering the position. You should be cautious at this time. If the stock rises after covering the position, you can reduce the cost of holding the position and achieve a quick unwinding method, but this method is relatively risky.

When covering positions, investors should pay attention to stock position management, and then set profit-taking and stop-loss points to prevent themselves from being trapped. They must know their ability to bear risks. If they cannot bear the risk, Risk capacity, it is generally not recommended to cover positions.