What does it mean to cover a position_What does it mean to cover a stock position?
Different stock market indicators have different meanings, etc., but for many investors, they have not gone into it deeply. Understand clearly, because they don’t know how to understand clearly. As for what it means to cover a position and do T, I will tell you the general meaning now!
What does it mean to cover a position and do T
To cover a position and do T means that investors buy a lower price on the same day The act of buying a stock and then selling a certain number of shares at a relatively high price to earn the difference.
When investors are trapped, they may perform T operations to cover their positions. Investors cover their positions at the low price of the day, wait until the stock price is higher than the position cover, then sell a certain number of stocks to earn the price difference, reduce the cost price of the stocks, and make up for their losses.
For example, Xiao Li purchased 1,000 shares of a certain stock at a price of 10 yuan. After the purchase, the stock price fell. When the stock price fell to 8 yuan, the investor covered his position and bought 500 shares of the stock. The stock price rebounded that day and the stock price rose to 8.5 yuan. At this time, Xiao Li sold another 500 shares of the stock.
Xiao Li performed a T operation by covering his position, which enabled him to realize a profit on the day: 500×0.5=250 yuan, which made up for some losses to a certain extent. After being trapped, in addition to covering positions and performing T operations, investors can also perform separate covering operations. Through the situation of stock falling, buy the stock in batches, increase the number of holdings, reduce its cost price, and wait for the stock price to rise to unwind.
What does stock cover-up mean?
Cover-up means that investors buy the same security on the basis of holding a certain amount of a certain security. The term cover is not only used for stocks, but can also be used for spot, futures, funds and other investment products. To cover a stock position is to buy the stock at a lower price, so that the unit cost price drops, in the hope of selling it on a rebound after covering the position, and making up for the loss of the high-priced stock with the profits earned from the stocks bought back to cover the position.
After investors purchase stocks, individual stocks are affected by some favorable factors, causing individual stocks to continue to rise. In order to increase their profits, investors carry out cover-up operations. Of course, this cover-up operation not only increases the number of shares held, , and also increases the cost of holding shares for investors. Once the market deteriorates, investors may be trapped. Reminder: The stock market is risky, so be cautious when entering the market!
How to calculate the cost price after covering a position?
After trading individual stocks, investors will add positions according to the market conditions. , its cost price will change. The specific calculation formula is: cost after covering the position = (first purchase quantity × purchase price + second purchase quantity × purchase price + nth purchase quantity × purchase price Purchase price + transaction fee)/(first purchase quantity + second purchase quantity + nth purchase quantity).
For example, Xiao Li buys 1,000 shares of a certain stock at a price of 20 yuan. After the purchase, if the stock continues to rise, when the stock price rises to 22 yuan, Xiao Li buys 1,000 shares again. The handling fee is 10 yuan. At this time, Xiao Li’s stock cost = (20×10022×10010)/(1001000)=21.005 yuan. Compared with before adding the position, his cost price is 1.005 yuan higher. .
Generally speaking, investors who add positions when stocks rise will increase their holding costs, and investors who add positions when stocks fall will reduce their holding costs.