Category: Money tips Release Date: 2007-03-12
On the snail-paced rush to cover short positions
â–?Big Time Investment
Bull market in operation to cover short positions should pay attention to what the problem?
First of all, cover their short positions role. To cover short positions can effectively reduce the investors holding the cost of rising trend in increasing the profits of a bargaining chip, thereby achieving even greater profits. In the current of the stock market, investors need to cover their short positions, the key also depends on the strength of individual stocks. Now the large number of listed companies, was mixed. No matter how the next tape operation, there must be some strong stocks continued to up, choose such a stock can actively cover their short positions; on the contrary, if not selected stocks that investors are advised not to risk cover their short positions. Since the current stock market as a whole or large investors cover their short positions when the operation still need to be cautious.
Second, the timing cover their short positions. The most appropriate time to cover their short positions are two-fold bears cattle turning point in the stock price is extremely low when the margin calls, which share low-cost; second is on the rise trend, rising trend is clearly to cover short positions to buy shares in the stock market is currently the second - kinds of situations. Therefore, investors in the stock-picking individual stocks, you must attach importance to the intrinsic rise.
Third, to cover short positions do not have to buy their own holdings. In most cases, cover their short positions to buy that he has equity holdings of shares of stock due to have been more familiar with, plus we can do intraday "T +0" a head start conditions, the probability of profit are naturally very Great. However, investors cover their short positions when the inertia of thinking must be out of limits: he did not hold stocks can cover their short positions. Because investors do not forget to cover short positions of the ultimate objective? Position is to lower overall costs and increase profit opportunities. Therefore, whether they choose to cover short positions before the buying of the stock, is not the crux of the problem, the key is to strive for profit maximization. To this end, investors need not restrict their right to choose stocks.
Fourth, we need to understand the method to cover short positions. There are five basic methods to cover short positions, namely: successive matching to cover short positions law applies to just entered the stock market, the market is also a lack of understanding, lack of access system, trading strategy investors; successive contour to cover short positions law applies to a loss of bearing capacity of weak, and are using their own funds, able to withstand a long wait for investors; France pyramid to cover short positions, should choose to not much room for stock prices and are suitable for the pursuit of steady earnings and do not expect to reap handsome returns for investors. In addition, those who can grasp the pulse of the market, with a certain level of investment for investors who use short-term arbitrage should focus on law and the low one-time cover their short positions to cover short positions method.
The number to cover positions, depending on medium to long term investors is based on creative or in short-term "T +0" action-based. If it is for short-term operation, then the number of shares to cover short positions need to buy the original number of shares held by the same, and must be the same stock to cover short positions, so as to facilitate access. In the case of medium and long term oriented, then there is no margin call number and variety of restrictions.
In addition, investors should pay attention to controlling the risk of margin calls. Cover their short positions when the greatest risk exists in some investors to cover short positions using the wrong method: A typical approach is to use a sub to cover short positions, we should gradually cover their short positions methods of operation, this is not correct, the most successful cover their short positions must be to a successful operation The. The risk of margin calls from investors to cover short positions is also a lack of stop-loss of the sense of operation. In fact, the fundamentals such as major changes in market conditions or the major turning point in market conditions, investors still need to come up with ton output capacity determination.
