The theme of margin trading (two financings) is "borrowing". Investors can "borrow money" (financing) and "borrow stocks" (securities lending) from securities companies. Before A shares margin trading, you must first understand three points: First, how much you can borrow depends on your net worth (account assets, deposit paid, which is similar to the meaning of submitting collateral for a loan); second, Interest must be paid; thirdly, if the loss in the stock market exceeds the warning line, the brokerage firm will also force liquidation of the position.
Like stock index futures, A-share investors also have "hate" and love for margin trading, and there is a huge gap between praise and criticism. The reasons for the critics of
are unprecedentedly consistent: is in a market with imperfect regulations, and many of them are novices and passionate. You give them such a "sharp blade" (such as margin trading, such as stock indexes that are generally disliked by small retail investors). futures), can easily become a risk amplifier, and they may lose their pants at any time. Those who are optimistic about
speak highly of the two financings, believing that can improve investors' capital utilization and do big things with small amounts of money. At the same time, securities lending is more conducive to improving the short-selling mechanism of the market and is a stabilizer of the market.
In A-shares, people who can play margin trading are the "ducks" in the "Spring River Plumbing Duck Prophet". Most of them are market pioneers, have keen insights into market trends, and can better judge stocks. It will rise in the future, so even if investors do not have "net worth" to participate, they can understand the margin trading data and understand the general rise and fall of a certain stock in the future.
Over the past few years of margin trading, its balance can generally reflect the current long-short power game in the market to a certain extent:
When the financing balance increases significantly and the securities lending balance decreases relatively, the stock is more likely to rise. ; On the contrary, when the balance of securities lending increases significantly and the balance of financing decreases relatively, the probability of stocks falling is high.
Of course, the above rules are not unique and can only be used as a reference. At present, most stocks have opened margin trading business . When investors operate, they need to consider risk aversion and avoid operating contrary to the trend.
1. Risks of securities lending
The biggest risk in securities lending is that occurs when a short jump occurs. If you can cover your losses in time, you will only lose a small amount of money. The problem is: if the trading volume is still shrinking and the short side wants to cover but cannot buy the stock, they will just watch it rise day by day and lose one daily limit. This is called short squeeze . During the bull market, investors are most likely to be short squeezed.
At this time, the securities company will do two things: First, when the entire household maintenance guarantee ratio falls below the legal ratio, the short side will be notified to take money to make up the total guarantee. If the short side ignores the call or the short amount is insufficient, the second step is to use the short side's margin to cover the stock.
If even a securities dealer can't buy it, he will buy it at the daily limit, and he will always buy it. All losses at this time will be settled in one lump sum when the stocks are eventually replenished. At this time, let alone losing money, it is not enough for investors to lose all the margin they originally took out for short selling, and the shortfall must be recovered. If you fail to pay, your credit will be bad and you will be removed from the stock market for life.
Another risk in securities lending is that the exchange stipulates that specific securities lending transactions must be covered compulsorily. Generally speaking, when the compulsory covering day is approaching, if the stock price keeps rising and the level of securities lending remains high, short sellers will not be able to find opportunities to cover at dips, and the long sellers will keep pushing up, resulting in increasing losses. Therefore, investors must pay special attention to the market performance on the mandatory covering day. (Excerpted from: Huang Xinhai)
2. Financing risks
Financing risks mainly occur when the market falls or the financing target stocks fall. At this time, if you can admit the loss and sell in time, you will only lose a little money. The problem is that the trading volume will shrink and it will not be sold.
Generally speaking, the market's retracement will be more moderate, and it will not be locked up by the daily limit like stocks. It is relatively rare for stocks to fall immeasurably.
Based on the above two points, many people think that the risk of securities lending is much greater than the risk of financing, but in my opinion, in actual operation, your operational errors are the biggest risk.
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