why does short selling keep falling _ short selling tips

why does short selling keep falling? Perhaps many people have been falling after trying the short-selling operation, and even finally there has been an explosion of positions. The following is why the short-selling brought by Xiaobian has been falling, and I hope I can help you.

why do short positions keep falling?

short positions keep falling, which will not lead to short positions. On the contrary, in this case, your profit may increase gradually. Short positions are usually related to the following factors:

Over-leveraged ratio: If you use a high leverage ratio to short positions, and the market price rises in the opposite direction, the losses may accumulate rapidly, which is beyond your tolerance. When your loss reaches the compulsory liquidation line set by the exchange or broker, it will trigger a short position.

insufficient margin: during short selling, you need to provide enough margin to meet the requirements of the exchange or broker. If the available funds in your account are not enough to maintain the position or add margin, it may trigger a forced liquidation, leading to a short position.

suspension or fluctuation limit: if the stock you are shorting cannot be traded due to suspension or fluctuation limit, you may not be able to close your position or adjust your position in time, which will increase the risk of short position.

please note that the above factors may lead to short positions, but the actual situation may be different due to the market, exchange rules and personal risk management. When conducting investment transactions, it is necessary to understand the relevant risks and adopt appropriate risk control and fund management strategies to protect your investment. If you have further questions about the short position, it is recommended to consult a professional investment consultant or broker for detailed discussion and guidance.

What do you mean by short position?

Short position refers to the phenomenon that when shorting stocks or futures, the margin can't be deducted from the loss due to excessive market fluctuation, so the broker is forced to close the position. Short-selling profits from falling asset prices. Both short-selling stocks and short-selling futures need to pay a certain margin. The theoretical margin is 1% of the actual position value, which means that the actual reverse fluctuation that investors can bear is only 1%. 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 open short orders.

What are the reasons for short positions?

Most investors who have short positions are losses caused by overweight positions. The deep-seated reason is that they are driven by market conditions for quick success and instant benefit, no longer afraid of the market, and there is no stock market risk in their consciousness. Many investors who have successfully traded in the market have closed their positions because of leveraged trading, resulting in the disappearance of their profits in the stock market.

when the market situation changes greatly, if most of the funds in the investor's margin account are occupied by trading margin, and the trading direction is opposite to the market trend, it is easy to break out due to the leverage effect of margin trading. If short positions lead to losses, which are caused by investors, investors need to make up for the losses, otherwise they will face legal recourse.

experts say that most short positions are related to improper fund management. In order to avoid this situation, it is necessary to reasonably control positions and manage funds to avoid possible Man Cang operations in stock trading; Unlike stock trading, investors must track the futures stock index in time. Therefore, the stock index of futures is not suitable for all investors.

What can be done to prevent short positions

Regular stock companies have their own risk control system. Although the company does not participate in the user's account operation process in the whole process, the company's risk control system will supervise the user's account and record the user's capital trend and profit and loss status. Especially when the stock market shows a sharp drop, the company can prompt users in time to prevent them from touching the warning line or the liquidation line.

the company will make an appointment with its users about the position ratio of a single stock, and users are not allowed to make single-ticket Man Cang. You should know that whether the user is making a profit or losing money, it is all borne by the user himself, so the user should pay more attention to his account management. Sometimes you may want to hold a whole stock when you find that the stock is in a good trend, but this practice is very risky and easily affected by market shocks. Users should try their best to prevent this operation for the safety of their own funds.

the management of capital account is a knowledge that users need to learn all the time. Only by mastering this technology can users prevent the situation of warehouse explosion.

What should you do when a stock goes up and down?

It is normal for a stock to go up and down, depending on how much it goes down and how much it goes up. For example, if you buy a stock, it will fall by 6% and rebound by 4% so that investors can see some hope, then it will fall by 5% and rebound by 2%. If this situation continues to rise less and fall more, you must learn to be timely when it falls to a certain extent.

You can set a stop-loss point when the stock falls, for example, 2%. When the stock falls to 2%, you can redeem the stop-loss point. Don't let the stock fall again. Many investors lose money in stock trading because they feel that they see hope, then fall and rebound, but they always fall more and rise less. If this continues for a long time, they will suffer serious losses.

If it goes up more than it goes down, it means that the stock is still good, and you can consider holding it for a long time. However, in the process of holding it for a long time, you should also learn to take profit and set a profit-taking point. Because the stock may fall again when it rises to a certain position, it is also very important to stop trading in time. Generally speaking, the risk of stock trading is great, so everyone should be cautious when operating.