To cover short positions Skills Analysis a prerequisite to cover short positions methods and three

Category: Money tips Release Date: 2006-11-08

Quilt at a high level, the margin call is a common remedy. "Bull market to make money, bears make stocks," for investors to cover short positions in shares of the opportunity to earn a bear market, once the stock rebounded, easy to turn defeat into victory. Operation, should pay attention to their conditions, methods and basic principles of the three do not cover their short positions.

First, to cover short positions of the three prerequisites:

1, the stock market has truly bottomed out, there is no broad market weakness is likely. If the broad market has been stabilized, you can cover their short positions, otherwise, it can not cover their short positions.

2, the stock has been severely oversold and has deviated from its intrinsic value. A result of the stock has fallen too far and makes the investment value or a speculative value.

3, fitted the fundamentals of the stocks the company does not appear worse, that is, the original reason for buying still exist.

4, price far lower than the original purchase price. Compared with the original purchase price, there have been a huge decline, can be considered to cover short positions. If the sets are not deep, you should consider stop-loss or convertible.

Second, to cover short positions of the basic methods:

1, to cover short positions should be opened price, preferably in more than 10%, if about 5% handling fee which consume too much, not only increases costs, but experienced a continuous decline soon because of the hands of insufficient funds, in a passive position. Also note that, in a continuous Yindie Do not easily cover their short positions, we must pull price, avoid repeated repeatedly to buy sets of ruining his state of mind.

2, may be in batches to cover short positions, not easily increase the amount. For the first time make up only half of the original position, skillfully deflected the question, can still cost-sharing. One advantage lies not only in the effective use of funds, but more importantly, have the initiative, if the first half of the margin call is still fitted, then the second half is not only a reduction in the cost of the entire position, but also locally is also the first time to cover short positions on the costs. Dropped by another important qualification, be able to further spread low-cost, passive to active.

3, to cover short positions are aiming to reduce costs, reduce losses, therefore, do not expect the adoption to cover short positions to achieve the purpose of profit. To cover short positions after the event of a rebound in reduced losses should be considered out.

Third, to cover short positions of the "three principles":

1, weak stock that is not completed. Because of weak stocks can not get out of trouble long-term goal to reach the final, but also by the share of non-active constraints can not get short-term profits, but increased the funding burden. Therefore, to cover short positions to make up on make up a strong unit, can not make up weak stocks.

2, the problem stock that is not fill. Unit is often easier to burst out "land mines", the share price movements often languishes on the issue of shares to cover short positions, no doubt belongs to "knowingly mountain tiger, favor such a difficult path," risk-taking behavior.

3, skyrocketing stock have not been replaced. Once the banker out of this village after the vote, it will fall into a long orbit, is often oversold oversold after, the end of the bottom, it is difficult there is opportunity to turn around.