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What is the need to buy foreign stocks?
What is the need to buy foreign stocks? _ Formal channels for buying stocks

What do foreign investors mean by shorting stocks? Why are there certain risks in shorting stocks abroad? The following is the necessity of buying foreign stocks put forward by Bian Xiao. I hope you like them.

What is the need to buy foreign stocks?

Diversification of investment risks: buying foreign stocks can spread the portfolio to the international market and reduce dependence on the domestic market. This can reduce the impact of specific risks (such as political, economic, monetary and other risks) of a country or region on the investment portfolio.

Access to global market opportunities: By buying foreign stocks, investors can participate in global market opportunities and get dividends from international economic development. Stock markets in different countries and regions may have different investment opportunities, and buying foreign stocks can increase investors' choices.

Volatility dispersion: the volatility of domestic stock market and foreign stock market may be very different. By buying foreign stocks, investors can introduce some assets with different volatility into their portfolios to achieve risk diversification.

Formal channels for buying stocks

Stock exchange: investors can buy and sell stocks through the stock exchange. Many countries have stock exchanges, such as China's Shanghai Stock Exchange, Nasdaq and new york Stock Exchange.

Brokerage company: investors can choose to register and entrust a brokerage company to buy and sell stocks. Brokerage companies provide stock trading services and provide investment advice and suggestions.

Online trading platform: With the development of the Internet, more and more online trading platforms provide convenient stock trading services. Investors can buy and sell stocks independently through online trading platforms, such as online trading platforms provided by securities companies or independent online stock trading platforms.

Foreign short selling stocks

Generally speaking, short positions refer to short positions made by bearish investors, but the market outlook suddenly rises, resulting in huge losses. For example, investors think that a stock will fall in the future, so they sell it to a securities company, but a stock not only does not fall, but even skyrockets. For short-selling investors, not only the principal loss, but also the leverage loss of securities lending are called short positions.

For securities investors, short positions mean that losses have fallen below the liquidation line. At this time, the proportion of protection will be reduced. If the margin is not added, the brokerage firm will be forced to close the position, and the losses and handling fees caused by the forced liquidation will be borne by the investors themselves.

In the futures market, short position is also a meaning. Because futures can buy up and down, investors who buy down have made empty orders, but the market outlook has risen against the trend, resulting in huge losses.

Generally speaking, for investors who do not have margin financing and futures options, there will be no short positions, because there will be no short positions unless the stock price falls to 0 yuan.

On the difference between stock short selling and financing;

Short selling of stocks means that investors borrow stocks for short selling. Short selling operations need to provide a certain percentage of margin and bear corresponding risks.

Stock financing means that investors obtain funds by pledging their own stocks or other securities for other investments or personal consumption. The financing operation needs to provide a certain proportion of collateral as a guarantee and repay the loan according to the agreed time limit.

Generally speaking, stock short selling is a trading method of short selling, and stock financing is a financing operation that obtains financial support by pledging stocks. There are differences between them in purpose, way and risk. Before any transaction, it is recommended to know the relevant rules and risks in detail and make careful decisions according to your own situation.

The harm of stock explosion

The stock explosion will cause serious financial losses to investors, so that all the funds in their capital accounts will be lost, and even the positions may be closed. In addition, the stock explosion will also cause a huge blow to the psychology of investors, which may lead to panic and anxiety of investors.