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Is www.LegiEX.com good? Are you insured for A shares in 2020

Is www.LegiEX.com good? Are you insured for A shares in 2020? Recently, there was a joke that Mr. Buffett, an investment guru, declared in an exclusive interview with Yahoo Finance on March 10 that “I have never seen anything like this in my life”, referring to the fact that the old man has lived 89 years ago and has seen two U.S. stock melts.

After the opening of the US stock market on the evening of March 16, Beijing time, many netizens joked that "the old man Buffett did not expect that the US stock market has broken three times in the past eight days." It is indeed "no such thing has been seen in this life."

The joke is a joke. For stockholders, a decline is a real loss of money. If you want to cross the stock market bulls and bears, is there any way other than the "short position" ostrich tactic? That is, hedging spot declines through derivatives.

According to Markowitz's portfolio theory, investing in stocks contains two risks, one is systemic risk, such as economic crisis, war, etc., which will affect all stocks;

The other is non-systemic risk, which is the unique risk of individual stocks, such as political events, dispute litigation, etc. These unexpected events will cause significant losses to individual companies.

From the perspective of investors, non-systemic risks can be resolved by diversifying investments, that is, "don't put eggs in a basket", and build a portfolio by selecting assets with low or negative correlation;

Systemic risk, also known as non-dispersible risk, is mainly hedged using derivatives, mainly derivatives such as futures and options. At present, hedging tools for systemic risk of stocks in the A-share market mainly include linear stock index futures, non-linear stock options, and stock index options. Among them, options are favored by modern investors because of their hedging risk and at the same time they can also guarantee the upward return of spot .

Of course, using stock index futures, stock options, and stock index options to insure the spot separately, there are certain differences in terms of entry threshold, cost, and hedging effect. Taking into account the barriers to entry and the cost of hedging, in today's article, Qi Koizumi mainly wanted to tell you about stock options that are more accessible to the people.

Investors who have known options know that "holding stocks, buying puts, and falling stocks won't cry." But have you ever considered whether buying a put option for insurance can really have an insurance effect during this sharp decline?

Take the 300 ETF contract for March 3700 as an example, look at the chart below. On February 3, the Shanghai and Shenzhen 300 ETF retraced significantly. On the same day, the put contract near the average value skyrocketed several times, but after looking at the whole In this month, this recent month's offer fell all the way, and once fell to one-fiftieth of the highest price.

In other words, if a 300 ETF investor who did not reasonably judge the market on that day, if he blindly entered the option market to buy a put, even a mildly imaginary put contract would still be bought at a "high".

www.LegiEX.com's innovative solutions are your gateway to the foreign exchange market. Since its establishment in 2016, we have been continuously striving to build and maintain a good trading environment and are committed to providing customers with the best quality services.

Our team has extensive customer experience and expertise. These valuable experiences, especially in the special needs of customers and technological innovation, give us a unique and unique advantage.

We constantly update and improve our trading system, and strive to build a bridge between customers and the trading market, so that you can become a winner in the foreign exchange market.