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Data:2009-12-12 2:34
Applied to cover short positions most prone to mistakes in policy in the stock price fell in the end when it has not yet eager to cover their short positions, resulting in more units to cover short positions deeper consequences. Therefore, to cover short positions only applies to the real trend in the market bottomed out after use, do not be premature in the broad market decline in the share of flat, otherwise, not only can not some sort of relief, but increase the financial burden.
To cover short positions in the timing of the strategic choice to achieve the "four no's compensation" principle:
First, the initial bear market can not cover their short positions. Stocks of the people understand this principle, but some investors can not distinguish between CBBC turning point in how to do? There is a very simple approach: stock prices do not fall deeply determined not to adopt a strategic cover their short positions. If the stock price than the lowest 5% do not have to buy to cover short positions, because arbitrarily time intraday volatility is likely some sort of relief. Than the lowest bid if the price 30% ~ 40% or more, and even some were cut short when the stock price, they can be considered to cover short positions, in which case a further decline in the space market outlook has been relatively limited.
Second, the broader market has not stabilized do not cover their short positions. Strategic to cover short positions are not required to have to buy at the bottom, the key is to cover short positions after the broad market and individual stocks have upward trend and momentum. The current investors have experienced a bear market, should be aware that in a bear market can crash after the broader market plunged, after the still oversold oversold indicator, the stock bottomed out can see the deeper after the end of a one-time to cover short positions that require to be a successful strategic cover their short positions is concerned, in the broad market has not really stabilized, and warming until the firm can not cover their short positions operate.
3, in the broader market is down firmly refused to cover their short positions when the channel. Because "nest eggs will survive seems ridiculous," a further drop in stock tends to drag along with the vast majority of individual stocks decline, of which only a very small number of adverse economic strength of individual stocks may be an exception. The so-called "set aside the election broad market stocks" approach is unrealistic. The best time to strategically cover their short positions in the bear market end of tape at a relatively low or when the success of broad market dip, when you have just reversed upward. Then tend to increase the potential for huge space for the smallest drop, cover their short positions safer.
Fourth, the broader market rebounded in the fall when the repeater can not cover their short positions. The so-called: "a rebound is not the end, is not the end of a rebound" rebound phenomenon speaks for itself in the market there are still long in a last-ditch, indirect description of a further decline in the market outlook is still possible, in which case it is inappropriate to use the strategic Jiancang The. (Figure 1)
Figure 1
Timing of tactical cover their short positions: For short-term operation in order to cover their short positions mainly for tactical greater range of choice, both sets of investors now are in deep or light sets of state, can be considered to cover short positions. As long as the tape is not exactly at the speed down on the way, they all cover positions can actively participate in tactical operations, the key is to reach the stage at the bottom of a good grasp of the timing of individual stocks, but also not to excessively high profit target, but also not to some sort of relief for the purpose of , in order to make a left there, especially the disk "T +0" operation is more to the case.
