Short position means that investors think that the current stock price is high, look down on the stock market prospect and expect the stock price to fall, so they sell the stock and sell it at a high price. This trading method of selling before buying and earning the difference from it is called short position.
People usually refer to the stock market with a long-term downward trend as a short market, and the changes of stock prices in the short market are characterized by a series of sharp declines and small increases.
The change of stock price is determined by the comparison of the strength of bulls and bears. The bulls will predict the price increase and make a purchase decision. Bears will sell their shares because they predict that prices will fall. Like other transactions, when the bulls and bears agree on the price, the transaction is reached.
What are the characteristics?
The market is generally optimistic, the popularity is boiling, and investors flock in, which indicates that the short market is coming.
When the bad news came out, the stock price rose instead of falling.
Bad news from the market keeps coming out, and the market is in a downturn, all of which are hung on the daily limit.
Enterprises, institutions and large households ship in large quantities.
Investors abstained in succession, while the stocks about to be ex-dividend showed no performance.
The popularity is scattered, and the willingness to pursue high is not strong.
Daily RSI is between 20 and 50.
Macroeconomic indicators showed an obvious downward trend, the surrounding markets fell in succession, the government adopted a tightening policy on the capital market, and prices rose rapidly.
The technical line type shows that the bottom is lower than the bottom.
The weekly moving average fell below 13 from top to bottom.
The result of drawing a trend line is a decline.
The 26-week moving average is falling, and the index or stock price is lower than the 26-week moving average.
What are the effects?
You can follow the example of foreigners and specify some stocks that can be shorted. For small and medium-sized investors, the introduction of short-selling mechanisms such as stock index futures can only mean an increase in risk. Short selling mechanism is a game of the strong. As a vulnerable group in the stock market, it is extremely vulnerable for small and medium-sized investors to participate in this dangerous game without the protection of laws and systems.
Short selling mechanism has positive significance and function to the stock market, but its negative influence can not be ignored. Especially for an emerging market with a short history, imperfect legal system, loopholes in rules and extremely asymmetric information, if its negative impact is not paid enough attention and effectively controlled, its lethality will be enough to destroy the whole market, trigger financial turmoil, undermine the stability of the situation and hinder the healthy development of China stock market.
This is by no means alarmist. The history of overseas securities market development has repeatedly shown the huge negative effects of short selling mechanism.
Of course, we point out that the negative effects of short-selling mechanisms such as stock index futures are not to prevent them from being launched, but only to remind small and medium-sized investors that the launch of short-selling mechanisms means and can only mean an increase in risks for small and medium-sized investors. Short selling mechanism is a game of the strong. As a vulnerable group in the stock market, small and medium-sized investors will easily participate in this dangerous game if they are not protected by strict and deterrent laws and systems.
Because the short-selling mechanism is very risky for the bookmakers, but the temptation of profiteering is huge. Under the temptation of profiteering and poor supervision, they will do whatever it takes to spread more false information, do business more frequently, jointly manipulate prices and so on.
Especially under the short-selling mechanism, stock indexes and stock prices will plummet frequently, which will make some groups and individuals gain huge profits and there will be real short positions in the market. For small and medium-sized investors who can only rely on the stock price increase, how can they have the ability to fight with short positions and win?
For the majority of small and medium-sized investors, we must be alert and alert to the short-selling mechanism; As far as the regulatory authorities are concerned, we strongly appeal that we must be cautious when launching the short-selling mechanism, especially when introducing relevant laws and regulations, strengthening supervision and effectively protecting the legitimate rights and interests of small and medium-sized investors.