Why is it that the more funds shorted by NOT and PEOPLE, the more fiercely they rise?
The underlying logic is the difference between investment and trading. Investment is about finding value. You buy spot goods and look at the fundamentals, which is called investment. Trading is a game of funds, and what you are looking for is popularity and hype space.
The basic principle in the secondary market: there are always people shorting when the price rises, and there are always people going long when the price falls. Shorting and going long belong to the derivatives market, which is leveraged. In a rising market, if there is a huge amount of funds shorting, if you are a large institution, do you want to eat up the other party?
If there is a large amount of funds shorting, it will force the short position, and the short funds will increase their positions, and then force the short position until the short funds are unable to increase their positions, and their positions will be blown up, and all the short funds will be pocketed. Only then will the market reverse.
So there is no need to worry about institutions constantly buying spot at high prices. If they cannot sell it when it falls, they will suffer losses. Even if there are losses, the amount of losses is very small compared with the funds harvested in the derivatives market.
The market of meme is relatively sufficient in the middle market and there are not many institutional chips. The dealer has pushed the market up 10 times in just a few trading days. This is the trend we often talk about. This trend has nothing to do with fundamentals and value. It has nothing to do with capital game. It is difficult to end this market without losing all the funds against the trend.
Many people understand that meme is pure air, a large number of shorts, and the dealer uses the advantage of funds to pull up the spot price, and then squeezes out in the derivatives market. The harvest is almost done, and then there is a double kill of long and short markets, because no matter from the market value, the price is not the original value of NOT.
Well, I believe you should have gained something after reading it. Finally, as a fresh blogger, I am motivated to bring fans ashore. The process is selfless and free. Here, it will be very simple for you to keep up with everything! I need attention, you need strategy! Click on my avatar to find me! #5月非农数据即将公布
