What are the restrictive reasons for buying stocks privately? What should I pay attention to first when operating my own private placement? The following are the reasons why Bian Xiao has brought you restrictions on buying stocks privately. I hope I can help you.
Reasons why private equity purchase of stocks is restricted
Investment risk control: the purpose of restricting private equity funds to buy shares is to control investment risks. There are fluctuations and uncertainties in the stock market. In order to protect funds and investors from excessive risks, regulators have set investment restrictions.
Investor protection: Private equity funds are generally oriented to professional and high-net-worth investors, not the general public. The purpose of restricting the purchase of stocks is to prevent non-professional investors from excessively concentrating or blindly following the trend, thus protecting the interests of investors.
Market stability and fairness: Private equity funds usually invest in a large scale. Without corresponding laws and regulations, large-scale investment may have an impact on the market, leading to market instability and unfair trade.
How do private equity funds operate stock investment?
Investment strategy formulation: Private equity funds first need to formulate investment strategies and determine investment objectives, scope and asset allocation. This includes market research, industry analysis, stock selection strategy and so on.
Stock selection: the fund manager will conduct stock research and stock selection according to the investment strategy. According to financial indicators, industry prospects, company performance and other factors, stock evaluation and purchase.
Buying operation: fund managers will use the trading platform of exchanges or brokers to buy stocks. According to the market situation and investment objectives, determine the buying opportunity and price.
Holding and monitoring: Once the stock is bought, the private equity fund will hold and closely monitor the performance of the stock. Fund managers will continue to track the market dynamics of stocks and company performance. , and make adjustments as needed.
Selling operation: when the predetermined selling conditions are met, the fund manager will carry out corresponding selling operation to realize the return on investment. Selling decisions can be based on profit targets, risk control, market changes and other factors.
What does the stock explosion mean?
In fact, short positions are forced liquidation. The reason for this situation is that the loss of investors is greater than the deposit in the investment account. Refers to the stock investment, because the market changes too fast, the stock loses money, which affects the amount of the deposit in the account, so that the deposit can no longer support the original trading contract and will be forced to close the position, which is short position. If there are short positions in the stock market, it often means huge losses for stock investors, which is also an investment situation that all investors are unwilling to face.
What is a short position?
Short positions can also be called forced liquidation. Simply put, the customer's interest in the investor's margin account is negative, and the loss is greater than the margin in the account. At this time, the company will carry out compulsory liquidation of the investor's financial account. The calculation method of the remaining funds after the strong level is the total funds MINUS your losses, and usually there will be some funds left. Generally speaking, it is often used in spot and futures trading. In addition, short positions are more serious losses than short positions, which means that investors have no funds in their accounts, but they have to return them to the company.
In futures, if there is a short position, what investors need to do is to make up for the loss and may be sanctioned by law. In China's current futures market, if the loss exceeds the margin, the futures company will close its position independently.
The concept of stock
Stock is a part of the ownership of a joint-stock company and a certificate of ownership issued by a joint-stock company. It is a kind of securities issued by a joint-stock company to all kinds of shareholders, as a shareholding certificate to obtain dividends and bonuses. Stocks are long-term credit instruments in the capital market and can be transferred and traded. With it, shareholders can share the company's profits, but also bear the risks brought by the company's business mistakes. Each share represents the shareholder's ownership of the basic unit of the enterprise. Every listed company will issue shares.
Every stock in the same category represents the equal ownership of the company. The share of ownership of the company owned by each shareholder depends on the proportion of shares held by each shareholder to the total share capital of the company.
Stock is an integral part of the capital of a joint-stock company and can be transferred and traded. It is the main long-term credit tool in the capital market, but the company cannot be required to return its capital contribution.