What is the stock market explosion?

Short position means that the loss is greater than the available funds after the account margin is deducted. therefore ...

What is the stock market explosion? The financial manager told you.

The so-called stock market explosion refers to the situation that the customer's rights and interests in the investor's margin account are negative under some special circumstances. When the market situation changes greatly, if most of the funds in the investor's margin account are occupied by trading margin, and the trading direction is opposite to the market trend, it is easy to explode the position because of the leverage effect of margin trading.

A short position means that the account equity is negative, which means that the deposit is not only completely lost, but also owed. Under normal circumstances, under the daily liquidation system and the compulsory liquidation system, there will be no explosion of positions. However, in some special circumstances, such as when there is a gap change in the market, accounts with more reverse positions are likely to explode.

When there is a short position, investors need to make up the deficit, otherwise they will face legal recourse. In order to avoid this situation, it is necessary to control positions, avoid Man Cang operation, track the market in time, and don't buy them all at once.