It may be a good thing for businessmen to explode their positions, but it is not a good thing for investors. For example, stock explosion and fund explosion are very dangerous, so does the foundation lose money after the explosion?

Will the fund lose money if it explodes?

The short position of fund refers to the situation that the customer's rights and interests in the investor's margin account are negative under some special circumstances, that is to say, the short position of fund will lose money. For example, if the stocks held by a fund explode, then the fund may also explode, but this fund invests in a basket of stocks, so it will basically not appear.

Theoretically, it is possible for a fund to break out, but the probability is not great. Because the foundation has a series of risk control measures, such as holding a single stock does not exceed 5% of the total market value of the position. If the fund bursts, it means that the risk control is too bad. The situation of private equity funds is relatively large. I have seen that private placement has no risk control measures at all, and Man Cang can hold a stock.

After reading the above introduction, I believe you have a deeper understanding of the fund explosion. The short position of the fund means that the fund has suffered serious losses, which leads investors to redeem the fund one after another. The conclusion drawn from the current fund market rules and historical data is that there is no short position risk in Public Offering of Fund and most private equity funds, and only a few leveraged private equity funds have short position risk.