Why do stocks keep falling, and bears don't lose money?

Of course, the bear lost money, but the bear thought there would be a lower price, so he shorted it.

The short selling mechanism is to borrow other people's stocks in advance, sell them when it is judged that the market is falling at a high level, and then buy them back at a low level and return them to the borrower to close the position for profit. Making a profit by rising is the opposite of buying stocks now. Because it makes a profit by falling, it will attract a lot of money to short in a bear market. Short selling here is different from what we usually call "short selling". Our short selling now is actually waiting to see. The decline of stocks and the less active trading are harmful to the market. Because of the possibility of short selling, short selling mechanism can attract a large number of off-site funds to enter the market in a falling market. Because investors have different views on the market outlook, some people are long, some are short, some are oversold, and some are oversold, so it will inevitably enlarge the trading volume.

The introduction of short selling mechanism is a great boon for brokers. As we all know, the profits of securities firms come from three parts: securities firms (collecting commissions), self-management (buying and selling stocks with their own funds) and investment banks (issuing and underwriting securities), because short selling can improve the activity of trading and greatly help to improve the brokerage business volume of securities firms. However, the actual situation now is that in the bear market without hedging mechanism, large funds can only choose to leave the market and wait and see, which makes the transaction volume tend to decrease. At the same time, the advantages of brokers themselves also make it possible for them to participate in short-selling operations and get more profits from the decline than before. Brokers are an important stabilizing force in the securities market. Regardless of the bulls and bears, brokers must make money to maintain the expenses of the sales department. In the current inactive trading situation, this is not conducive to improving the brokerage and self-operated business volume of brokers. In the long run, it will inevitably lead to the operational risks of securities firms.

At present, the lack of short selling mechanism in the securities market has also affected the development of securities-related industries, such as the securities broker system and bank securities business. Although some securities companies are enthusiastic about recruiting securities brokers, they are afraid of losing money because of the lack of hedging mechanism for OTC funds, which is an important reason for the stagnation of this system. At the same time, it also greatly reduces the funds entering the stock market through bank securities, which is also unfavorable for improving the business volume of banks.

The introduction of short selling mechanism is bound to become a means of maintaining and increasing the value of the fund industry. Since 200 1, there has been a strange phenomenon in the fund industry, that is, the market value of funds has been depreciating with the decline, which will inevitably have a negative impact on the management reputation of the fund industry and even affect the overall development of the fund industry. In addition, because insurance companies account for a large proportion of the fund's major shareholders, the depreciation of the fund will also introduce risks into the insurance market. With the short selling mechanism, fund managers can change passive warehouse keeping operation into active hedging operation, which will help improve the management level of the fund industry and adapt to the competition and challenges of the international fund industry after China's entry into WTO.

Short selling mechanism is conducive to improving the activity of weak market transactions, attracting funds for various purposes to enter the market, and is also very helpful to improve the financing function of the securities market. The existence of stock market lies in its direct financing function. In the falling market, it is very difficult to issue new shares, for example, the issuance of new shares was forced to be suspended in the second half of 200 1. With the short selling mechanism, no matter what kind of market, the stock market always gathers a large amount of funds for various purposes, which can greatly activate the trading level and will inevitably alleviate the difficulty of issuing new shares.

The risk degree of short selling mechanism is different from that of stock index futures, which is determined by its margin ratio. The short-selling mechanism is generally 100% margin, which is the same as the current stock trading, while stock index futures are futures varieties, and the margin cannot be 100%. For example, the current soybean futures is 5%, which means that as long as there is a book loss of 5%, your investment will evaporate. Therefore, the usual practice abroad is to launch short selling first and then stock index futures to ensure that investors are familiar with this trading variety and operation method.