We all know that in order to make money in the investment process, the correct investment strategy is indispensable. This also requires that we must always pay attention to market dynamics and be aware of every professional term. We often listen to futures trading. When it comes to the word “sell to open a position”, what does it mean to sell and open a position?
What does it mean to sell and open a position? How do you make money by selling and opening a position
The so-called opening of a position refers to the opening of a position, which refers to an investor who initiates an option transaction and establishes a position in the account. Investors can open positions to buy call options, buy put options, sell call options, and sell put options. If you want to make a transaction in futures trading, you must first establish a position. The method of establishing a position is different. There are mainly two methods: “buy to open a position” and “sell to open a position”:
Buy open position
Buying and opening refers to the operations of going long, buying up, and buying long. When investors are optimistic about the possible future price increase, they can open a position by buying in advance and wait for the future price to rise before selling. Profit from one transaction. There is another way to call a long position to open a position.
For example, the current silver price is at 5,000 yuan/kg, and investors are optimistic about the future price increase, so they buy at 5,000 yuan/kg. This operation is called “buy and open a position” and wait for the future price to rise before selling. A transaction consisting of “buy open position” and “sell close position”.
Sell open position
Corresponding to buying and opening positions is selling and opening positions. Selling and opening positions refer to short, buy-down, and short-buy operations. When investors are short on the future price may fall, they can borrow a portion from the market in advance Open a position by selling goods, wait for the future price to fall, and then buy goods from the market to repay the previous loan, thereby completing a sell opening operation.
For example, the current silver price is at 8,000 yuan/kg, and investors are bearish on the future price decline, so they lend certain goods to the market at 8,000 yuan/kg to “sell and open a position” (through margin trading) and wait for the future price to fall. Profit has been made at this time, but it is necessary to buy the same amount of goods from the current market to repay the previous loan, thereby completing a “sell open position” and “buy close position” operations.