Question 5 about Short Selling, Question about Short Selling

Stockless short selling seems to be a policy in the market, and here is an example for you: The U.S. Exchange Commission, under strong political pressure, announced on Monday that it would permanently implement the emergency policy of prohibiting stockless short selling during the financial tsunami to curb the activity of shorting without borrowing in advance. When investors are bearish, they will borrow the company and in the market, and when the stock price is on the market, they will return the price difference and earn the difference.

The policy expired on Friday, and the Exchange Commission considered implementing new measures to reduce the sudden emergence of a large number of short selling orders in the market, but some industry insiders said that the authorities' measures to restrict short selling have brought about large fluctuations in stock prices and other counterproductive effects. Rep. Kaufman, a Democrat from Delaware, said: "Investors need to see real action, and the trading commission's action did not propose a solution, only delayed it for two months. 」

It is some institutions that want it, such as using it to short or long, it should be like this: for example, if you are long and the institution is short, the institution will give you a certain fee to lend you (such as **), and return it to you after a month, and the institution will use it to short, and then buy it back at the end to make the difference.

Chinese expression] no goods short selling.

English expression] naked short selling speculators in trading, in the trading market**or claiming** that they do not hold, **, **, etc., commodities or assets, and hope to be in the future at a lower **** equivalent amount of the same commodity or asset.

A large number of unstocked short selling will lead to a large number of selling orders in the trading market, which is relatively easy to lead to the **** of the commodity or asset in the market, and it is easy to cause a market depression effect, such as a stock market crash or a small stock market crash.

If the asset does not go smoothly but turns around and rises, the speculator will need to buy the asset back from the market in the future to complete the transaction. If the speculator itself does not have the economic ability to buy these assets, the speculator will either borrow or evade debts, and the result will be chaos in the financial market, which may lead to a certain range of financial turmoil in serious cases.

Maybe this is **, personal understanding is like two people gambling. Assuming that the price of gold does not fall but grows after a month, wouldn't it be that he loses money and the other party makes a profit? Personal understanding ** is to agree to buy and sell the transaction now, and one party pays the money and the other party mortgages the contract.

Chinese expression] no goods short selling.

English expression] naked short selling

Speculators in trading, in the trading market**or claiming** that they do not hold, **, **, etc., commodities or assets, and hope to be in the same amount at a lower ** in the future.

Naked short selling refers to the speculation of a speculator on a commodity or asset that he or she does not hold in the trading market, and hopes to sell the same commodity or asset in the same amount at a lower price in the future. This behavior directly leads to a large number or large amount of selling orders in the trading market, which can lead to a sharp decline in the commodity or asset in the market, and is easy to cause a market depression.

If the asset (e.g. **) goes as desired in the future, the speculator can make a profit on the difference.

For example, suppose that **** is $1200 per ounce at the moment, and a speculator believes that **** will soon fall to $1100 per ounce, and the speculator claims to be ****1000 ounces of ** at $1200 per ounce without holding **, and the transaction date is one month later. After a month, if **** goes smoothly to $1,100 per ounce, the speculator can buy back 1,000 ounces from the market with $1.1 million at a cost of $1.1 million, making a profit of $100,000.

On June 18, 2010, Germany suddenly announced a ban on short selling in the ** market, which surprised investors and triggered a great chaos in the global market. Global** and commodities plummeted, and the euro rose and fell, once hitting a 4-year low, falling below the level of 1 euro against the dollar.