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Accompany you to make money in the stock market!
The representative of Niuniu class is coming!
What I want to share with you today is the "short" mechanism.
The class representative combined the Hong Kong and US stock markets according to the specific content.
Therefore, today's "20 lectures on Hong Kong Stock Investment" and "20 lectures on US Stock Investment" have been merged into one section!
Niu friends, please pick up the small bench and come to class together.
From the birth of NASDAQ to lightning delisting, LUCKN COFFEE DRC walked for 410 days.
The capital market learned the lesson, onlookers watched the story, investors cut the meat sadly, consumers drank cheap coffee, and the bears who persisted to the end became the biggest winners.At least 500% of the income has been harvested on Lucky.
However, because the A-share market does not support short selling, most investors in China are relatively unfamiliar with the short selling mechanism.This system has been quite mature in overseas capital markets.
According to the statistics of public data, there are at least 40 Chinese-listed stocks that have been shorted overseas so far in 2010. Among them, there was an upsurge of short selling of Chinese stocks during the period from 2010 to 2012.
What is short selling?
Short selling is the symmetry of short selling, also known as short selling.
It means that the securities speculators in the securities market take advantage of the soaring securities prices to borrow a large number of securities and sell them at high prices in the market, and then buy them back at a low price and return the borrowed securities after the securities prices fall in the future.A kind of speculative trading of securities that profits from it.
So, is it true that the legendary "shorting can make a family rich?"
First of all, we need to know that short selling is a special mechanism for selling before buying, that is,It means being bearish on the long-term trend of traded stocks or securities.. Short sellers can benefit only if the trading securities move in line with bearish expectations.
In addition,More investors will use short selling to hedge their share prices.
The specific mode of operation is to sell their own stocks in the way of short selling in order to prevent the stock price from falling. If the stock price does fall, then the establishment of short selling enables investors to profit from it and make up for the loss caused by the falling stock price; if the stock price rises, then the rising profits of holding stocks and the losses of short selling can also make up for each other.
Although short selling is simple in theory, there are many detailed rules in practice.
Margin account requirement
The type of account is generally divided into cash account and margin account, in which the margin account is actually funded by securities firms for investors, and investors bear the profits and losses of investment (that is, leveraged). The most basic requirement for short selling in a margin account is that a cash account cannot be shorted.
Price restriction
Us stocks are usually not allowed to short "fairy stocks". Fairy shares were originally defined as small-cap stocks with low share prices and low market capitalization, but because "low" is a relatively difficult concept to judge, most brokerages uniformly prohibit investors from shorting stocks with a share price below $5.
Fee / interest payment
In the process of short selling, investors need:
(1) to pay interest to the brokerage based on the corresponding value of the stocks lent.
(2) return to the brokerage the interest dividend that should be received in the process of short selling.
(3) to pay other transaction costs. As long as the short selling period, investors can pay the above three fees or interest, in theory, there is no time limit for repayment.
Short selling of Hong Kong and US stocks
In Hong Kong's capital market, not all Hong Kong stocks can be used as "short sellers".Only the "designated securities that can be short sold" published on the website of the HKEx can carry out short selling.. Designated securities that can be shorted are reviewed and adjusted periodically on a quarterly basis.
Another special thing about short selling in Hong Kong is thatThe law of Hong Kong prohibits anyone from selling shares that he does not own.Unless he owns it at the time of the sale or honestly and reasonably believes that he has an immediately exercisable and unconditional right to vest the shares in his personal name. The general practice is that in placing an unprecedented order, the investor enters into a valid "share lending agreement" with the brokerage holding the shares and is confirmed by the lender that there are sufficient shares to borrow.As part of risk management measures, brokers require customers to provide collateral equivalent to at least 105 per cent of the market value of the borrowed shares.
On the other hand, there are many ways to short in the US stock market.It includes directly shorting individual stocks, buying and selling options corresponding to stocks, buying options corresponding to index, ETF shorting US stocks, and shorting through futures.
Next, the class representative will give you a specific case to actually analyze the short selling mechanism of US stocks!
Case study: the actual operation of short selling in US stocks
There are a variety of ways for short selling of US stocks. Here is a brief introduction to the operation of short selling.
First, check the short selling rate of this stock.To American stocksFrom whom to learn (GSX.US) $For example, stocks that support short selling will have a sign below the price that supports short selling. After clicking in, you can check the margin rate of short selling.
After we have a clear understanding of the relevant rate rules, we can directly carry out the short selling operation of US stocks.Click the "trade" button, in the case of not holding stocks or selling more shares than you already own, it will automatically trigger the margin selling operation.
If you want to learn from who you want to sell short, fill in the quantity 10 when there is no position, and click "sell", that is, you will learn from whom you have shorted 10 shares. In the position interface, the number of positions will be negative.
The actual operation method of Hong Kong stocks is similar to that of US stocks, but not all Hong Kong stocks support margin selling.You need to consult the relevant documents issued by Hong Kong Exchanges and Clearing to determine which stocks support short selling.
In addition, Futuo Niuniu APP temporarily does not open the short selling operation of Hong Kong stocks, investors can buy put options to achieve short selling.
What if the company that makes the short mark is delisted?
There are many situations of delisting, such as mergers, acquisitions, privatization, not meeting the listing conditions, facing bankruptcy liquidation and so on.
If it's becauseMergers, acquisitions, privatizationIf there is no fundamental change in the company's fundamentals if the company is delisted, thenThere will be a clear price or stock conversion to settle the shares that should be returned to the brokerage.
If the stock is delisted because of deteriorating fundamentals, the stock will be traded over the counter.
Some companies just do not meet the listing conditions, the company still continues to operate and has trading value, and there will be continuous trading volume even over the counter; some companies are difficult to sustain and have almost no value, so the stock is about to return to zero and no one is interested in it. After many short positions, it will come to an end.
It is worth warning that the low level of liquidity in over-the-counter trading will add to the transaction costs of the liquidators.
Risk warning
The stock market is more likely to rise than to fall.
After the stock rose, it fell back for different reasons. There will be adjustments in the stock market, such as bear markets, crashes and so on. But in the long run, the stock market itself often reflects the development of the society's economy, science and technology and civilization. The whole development trend of mankind is to move forward, which is a historical law that no one can stop. In the stock market as a whole, the success rate of bears is lower than that of bulls.
Availability and stock rally rules make it more difficult for short sellers to invest.
Short selling is also called short selling, and sellers borrow it. The first step in short selling is that brokers are willing to lend shares to investors, so the closing time of short orders is often longer than that of buying orders. The exchange also has a "up" criterion for short selling, that is, when stocks are falling all the way, investors cannot sell short and must wait until the next rise to place a short order.
Risk of air-rolling compensation。
The so-called short covering means that when the stock price continues to rise, short sellers cover short positions one after another in order to reduce losses (buying stocks and returning bonds), and a large number of short sellers at the same time will lead to a further rise in stock prices, resulting in greater losses for short sellers.
The risk of insufficient margin.
When engaged in margin trading, losses are easy to get out of control. Because each account must meet the minimum maintenance margin requirements. If the margin of an account falls below this requirement, the account will be forced to add a margin. Once short sellers fail to make margin calls in time, they may be forced to close their positions.
The risk of forcing the air out.
Sometimes, when some institutions learn that there is a large amount of short selling in the market, they increase their positions and master a large number of liquidity, thus making it difficult for short sellers to buy stocks from the market at that time. This is the so-called "forcing short". Forcing out the air is a form of liquidity risk. The liquidity risk of short selling is mainly reflected in some stocks with smaller equity.
Risk of price increase transaction。
Hong Kong Exchanges and Clearing requires that short selling must be done by raising the price, that is, the price of short selling securities must not be lower than the lowest selling price on the current market. This rule means that when the market falls, short selling can only be done at a higher price, so short sellers cannot cause the market to fall to make a profit, and may also make it difficult to match short selling transactions.
Generally speaking, short selling is a good way to preserve the value of stocks, but it also faces its own uncertainty and liquidity risk. Investors should think rationally and make prudent decisions when making portfolios.After all, the room for stocks to rise is unlimited, while the room for stocks to fall is limited.
Supplementary reading
1、"Why do you say not to go short easily? "
What short sellers want most is for others to go bankrupt, which is a zero-sum game! Short selling can be succinctly summarized into the following two types: (1) overvaluation and (2) corporate fraud. But it is hard to satisfy any of the above.
2、"one picture flow | XIAOMI's stock price rose sharply, but short position soared."
September first$XIAOMI Group-W (01810.HK) $It has reached an all-time high of more than HK $25, which has doubled since the beginning of the year.
With the sharp rise in XIAOMI's share price, the position of shorting XIAOMI has also soared recently (such as the red on the chart below). But according to XIAOMI's current rising trend, it is likely to be "short" ah!
It is very painful to learn from anyone to go short, or to short any company. Many people lose a lot of money in the process, but we still have to move on. If we lose money once, we have to learn some lessons. Many investors are still young. If you lose money, you can take a lesson. You can afford to grit your teeth in this lesson. The key is what you can learn from it.
That's all for today's sharing!
Welcome to the message area for interaction!
The class representative will select 8 participants in the discussion area and give 188 Niuniu points!
Tomorrow's lessons will continue! Don't break up until we see you!
Links to courses are as follows ~
"introduction to Hong Kong Stock Investment course"
"introduction to American Stock Investment"
Edit / lydiali