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What are the stock short-selling mechanisms?
What are the stock shorting mechanisms _ How to make money by shorting stocks?

It is often said that stocks are short, or a stock is short. The speaker is not interested in listening and wants to know what it means to short a stock. If you want to short a stock, what are the short-selling mechanisms organized by Bian Xiao? For reference only, I hope to help everyone.

How to short a stock

Shorting a stock is different from its apparent meaning, which means selling the stock without optimistic about its future rising prospects and then buying it at a low price. For example, the current price of a stock is 10 yuan, and Xiao Wang holds 100 shares. He thought the stock would fall in the future, so he sold it in time and earned 1000 yuan. When the stock price fell to 6 yuan, he bought 100 shares, and spent only 600 yuan to get the profit difference of 400 yuan.

Short selling of stocks is characterized by the trading behavior of selling first and then buying. It is not an unrealistic idea to make a stock junk or even delist. Short selling is a way of operation in the stock and futures markets.

Need to be reminded that the short-selling mechanism of stocks is a game of the strong. As a vulnerable group in the stock market, if there is no legal and institutional protection, it is extremely fragile for small and medium-sized investors to participate in this dangerous game, and no one can accurately predict the future trend of a stock. Blindly shorting will only lose your own interests.

What are the stock short-selling mechanisms?

The first is the common short selling of securities.

This is an example of the mound and pickup mentioned by Bugo above. Also known as lending securities, it means that investors lend securities to securities companies with funds or securities as collateral and sell them within the agreed time limit. Buy the same quantity and variety of securities, return them to the securities company, and pay the corresponding securities lending fee (from Baidu Encyclopedia). This short selling in the market is basically provided by securities companies, which means that there must be corresponding buttons in your stock trading APP.

The second is to short in the option futures market.

Since futures options are essentially a kind of power, there must be a short seller behind everyone who is long. Unlike stocks, you need to borrow money. I won't say much about this, as long as I know about futures. Generally speaking, larger stocks will have corresponding futures, options and indexes. It can be used for a short time.

Third, short ETF.

If you don't look at a market or a basket of stocks. There are such standardized products and services in the market to achieve your short-selling goal. For example, the ETF that is short below.

The way to make money by shorting stocks

The general way for short-selling institutions to make money by shorting stocks is: first, analyze the operating conditions and financial reports of each company, find problems, and then spend a lot of manpower and material resources to investigate the actual situation of the company. After comparing the obtained data with the published data, it is found that there are indeed problems, which will lead to a large number of stocks being lent out by brokers and making false announcements. At this time, listed companies will plummet because of these news, and the stock price will plummet. Short-selling institutions can sell again to earn the difference.

This kind of operation is relatively routine in the actual financial market, because shorting can reduce market volatility and make the stock price tend to be stable. Secondly, it can prevent the stock market from being manipulated maliciously and rising irrationally, because many companies, in order to raise the stock price, do not hesitate to make financial fraud, make profits with unreasonable behavior and harvest investors' leeks. At this time, short-selling institutions will become the protectors of leeks, contribute their meager strength, find problems, short stocks, and promote the stock price to be reasonable. Protect unsuspecting retail investors and prevent them from falling into it.

To sum up, we know that the main ways to make money by short selling are almost the same as those by long stocks. They provide market liquidity and establish a good system for the market.

To sum up, at present, China stock market can only make profits by "doing more" besides dividends. That is, investors buy stocks at a low price, and then sell them at a high price in the process of rising stocks, and the difference in the middle is used as investment income.