Are there any gains from shorting stocks with short money? What exactly does short mean here? What is the specific meaning of shorting funds? Can we benefit from it? The following are short stocks compiled by Bian Xiao for everyone. I hope you like it.

How about shorting stocks?

Short selling refers to the phenomenon that when shorting stocks or futures, brokers are forced to close their positions because the market fluctuation is too large and the margin cannot deduct the losses.

Short-selling profits from falling asset prices. Shorting stocks and futures requires a certain margin. The theoretical margin is 10% of the actual position value, which means that the actual reverse fluctuation that investors can bear is only 10%.

In terms of stocks, short selling is realized by borrowing stocks through securities lending and then selling them, and then buying and returning the stocks after the stock price falls, while futures are directly short positions.

In short, both stocks and futures are debt-free settlement, so when the market is unfavorable, the principal loss cannot be "held in debt" after completion, and then it will be forced to close the position.

How does the stock bear operate?

The operation mode of stock shorting is to find the position where any stock or index can't continue to rise, that is, continue to rise to the immovable position. Generally speaking, stock bears refer to investors who are bearish on the current market. They generally have two characteristics: first, if the market turns, they are the first to clear out. The second kind is that individual stocks go up and sell until there are no chips in their hands.

Contrary to the operation of stock bulls, stock bears often appear at the highest point of the stock. The more they operate at a high position, the more the stock market falls. They are the main obstacles to the rise of the market for a period of time, which will increase with the rise of individual stocks and decrease with the decline of individual stocks. It may change from bull to bear because of the technical deterioration of individual stocks, or it may change from bull to bear because of the continuous skyrocketing of individual stocks, so what kind of funds the specific stock bear will exchange depends on the market environment.

What are the consequences of short positions?

If the margin cannot be replenished in time after short selling, it will be forced to close the position, that is, forced to sell, to ensure the interests of brokers or brokers.

The method of shorting stocks is to borrow stocks from brokers and sell them, and then buy them back to brokers after the stock price falls to a certain extent. Therefore, once the stock price rises after borrowing shares and the increase exceeds the proportion of our own margin, there will be short positions. It is much easier to short futures, just open an empty order directly.

In fact, stocks and futures are settled through debt-free, so in the case of bad market, once the principal loses, it can no longer be held in debt, but will be forced to close the position.

Method for avoid inventory explosion

1 Don't buy bad stocks.

Keeping away from bad companies is also the most important principle to avoid a plunge. Poor fundamentals and poor performance are the main reasons that affect the company's share price.

Don't buy dishonest stocks.

Before buying the company's shares, it is best to ask the company carefully whether there has been any dishonest behavior in violation of laws and regulations in the past. If a company does not have good faith once, it will have a second time.

Don't buy stocks whose performance has fallen sharply.

Before buying company stock, we should look at the performance of the stock in the past six months. If there is a sharp decline in performance, it is recommended not to buy, because the decline in performance is the fuse that leads to a sharp decline.

Don't buy stocks that keep falling.

Under normal circumstances, if the market or individual stocks fall sharply for three consecutive days, it may be a dangerous signal of trend change, and it is necessary to close the position immediately to ensure their own safety.

What are the effects of stock pledge on stock price?

1 the announcement of equity pledge has a negative impact on the stock price of listed companies in the short term, because equity pledge releases the signal of insufficient cash flow of the company and reduces market expectations.

In the long run, the shareholders of listed companies pledge their own shares, and the lifting of the ban by shareholders can reduce the overall situation, and the impact on the stock price belongs to neutral preference.

If it is the pledge of restricted shares of major shareholders, it will not affect the circulation scale, and the impact on the stock price is almost zero.

Summary: Equity pledge refers to the way that shareholders of listed companies raise funds from banks and securities with their shares as the subject matter. When a major shareholder pledges his shares to a financial institution, if the stock price falls to the liquidation line and the major shareholder fails to make up the position or buy back, the financial institution has the right to dispose of the pledged shares.

Advantages of pledged stock repurchase

As a new business, stock pledged repo business has many advantages compared with similar products. For example, high capital efficiency, low financing cost, high conversion rate and flexible term.

1, with high capital utilization efficiency. T day can be traded, T+ 1 day funds arrive. Pledged shares do not need to be transferred, which has no influence on shareholder status.

2. The nature of pledged shares is not restricted. For example, some restricted shares, foreign-funded shares and banned shares held by Dong can be financed, and major shareholders holding more than 5% can pledge more than 5% of the shares.

3. The financing period is flexible, up to three years. The business model is also very flexible. If certain conditions are met, some securities can be pledged, and there is no need to go to a notary office or a registered company for notarization and pledge procedures.

The difference between stock pledged repo and stock pledge

Stock pledge loan generally refers to the mortgage of shares (including restricted shares) to banks and other financial institutions, and the next payment is relatively slow, taking 2-4 weeks or even longer; Or private lending, with stocks as collateral, people lend you money.

The difference between stock pledged repo and stock pledged repo is that stock pledged repo is a new business of securities companies. The acquirer uses the pledged shares to integrate funds, and agrees to return the funds and cancel the pledge in the future. The next payment only takes 1-3 working days, and short-term and long-term loans can be made.

Although there are only three differences between stock pledge and stock pledge repurchase, they are two completely different concepts. Therefore, we must learn to distinguish and understand their respective operational processes.