How do I go short

Today I'm going to talk about some of my tips on how to go short.

In fact, I've always believed that shorting and going long are essentially the same for trendsetters like me. That is, wherever the K-line trend goes, I will follow it.

I go short and go long; there are usually two methods: underlying stocks and options. Some experts also use futures; I wouldn't, and never tried.

The original stock is relatively simple; you can simply short sell it. Compared to options, this does not waste time. Of course, the leverage ratio is relatively small, and it also takes up security deposits, so there is a risk of bursting out of positions. In my current position, the withdrawal function of my account was blocked for a while due to a short position in Goose Feather Stock Yandex, which is very embarrassing.

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Also, there are options. Options are also divided into long and short positions only. Short positions, like short stock sales, also have margin risk issues, but as the value of time disappears, time becomes the friend of short positions.

I mainly want to talk about long-term options positions, that is, buying put options directly. The characteristic of this approach is that there is no margin risk, the leverage ratio is relatively high, and time value is the key.

Timing is a key factor in the success of long-term options positions.

At the beginning of 2019, soon after Pinduoduo went on sale, I saw that the K line was right in line with my judgment about entering the Changduo pattern at the time, so I bought it in January. I remember it was 27 yuan at the time. I bought the underlying stock and options separately. Since I think it's been a long-term trend, I bought a call option that expires after 6 months. More than a month after the purchase, the stock price continued to rise and quickly rose to 31 yuan. I usually set a goal of doubling when I bought, so I ignored it. Who knows, starting in March, PDD began a 3-4-month correction. At that time, I didn't have many US stock positions, and I didn't pay immediate attention. As a result, PDD fell to a low point of 18 yuan near the expiration date of my long options. This portion of the options was almost completely destroyed. The stock price began to stretch after June-July, breaking through all the way, and eventually rose to 212 yuan after the epidemic was released. And my call options were sacrificed early before the dawn of the PLA's arrival. Fortunately, the original stock is still there, but I didn't wait until 212. Clearing the position in the 8-90 yuan range is considered to have made up for the loss of the options.

So even if you get your goals right, and look in the right direction, options won't necessarily help you make money. There are the same problems with going long and short on options.

Now I'm going back to the point where I bought it. At the time, my Three Swords of Bull and Bear also had two out of their scabbards, and since PDD was a new stock, there was no data on the third sword! After that, I set myself the principle of not participating in the trading of any new shares or new shares.

When shorting this time, I basically used the method of directly buying a put option.

When shorting began at the end of last year and the beginning of this year, the market had not fully entered the bearish pattern at the time. Basically, the target was Sister Mu Tou's stock, but $ARK Innovation ETF(ARKK.US)$ It was the first to enter a bear market at the time. For the insurance period, my first short title, SQ, chose the one that only expired in September of this year, just to avoid the lessons of PDD back then. Since March, the general situation has gradually become clear, and I have become more courageous to shorten the expiration date of the target to 6 months. Also, the same target is divided into 3-month and 6-month options, and positions are rolled over as time is delayed.

Looking back now, this round was right. At the time, if I chose short-term targets, even for a month or two, the profit would definitely be much greater, but I don't regret it, because I was at least relieved to buy it at the time. Moreover, even with such a forward option, the benefits far exceeded my own expectations.

After thinking about it, I decided to post the return rate of one of my accounts from shorting last year to the present. I know I'll punch you in the face every time I'm done. Maybe I'll start to retreat right away. Maybe others will say that I made a fake P map or something; that doesn't matter; that's enough; it's enough to get over it.