Margin and securities lending operation methods under different market conditions: (theoretical operation)
1/ The market is in a bull market stage, and higher profits can be obtained through financing, adding positions, and gambling; (only in the short term, because excessive market enthusiasm often causes investors to take higher risks)
2/ When the market is in a bear market, you can short-sell individual stocks through securities lending and make money from the price difference of falling stocks; (Usually the interest rate of securities lending is very high. If you cannot obtain substantial profits, it is recommended not to use it)
3/If the market fluctuates sideways, you can use financing to do T+0 and repeatedly sell high and buy low; (more effective for investors with a higher short-term investment winning rate)
4/The market is in an uncertain stage, and risks can be hedged through financing purchases and securities lending; (but corresponding financing fees will also be paid)
Of course, there are more operating methods for leverage trading, but most retail investors can use the above operating methods.
What to pay attention to:
1/ Margin margin trading is a leveraged transaction, which not only magnifies returns but also intensifies risks. It is recommended to operate with caution;
2/Margin and securities lending business requires transaction costs, and securities companies will charge interest on margin financing and securities lending;
It is recommended to choose a brokerage with lower financing interest rates, which can reduce your financing interest burden.
The current market financing interest rate I know is very cost-effective, 5% per year. Interest is calculated on a daily basis, based on how many days it takes;
How to get a 5% financing account:
Find a brokerage account manager (v:) to provide one-on-one price consulting services instead of opening an account online yourself. The interest rates for investors to open accounts online are generally 6% and above, which is not cost-effective to calculate.
I hope it can help everyone understand more about leverage trading.
标签： #Margin #Stocks #Stock Financing #Investment
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