Risk management and speculation techniques during the downturn

In 2024, the market is on a downward trend. Investors need to carefully analyze risks and research them before investing. Therefore, ACU PAY would like to recommend how to investments to be profitable and at a minimum loss.

1. Using derivatives for both short futures and long put options

To diversify the risk of bear markets, such as investors investing in stock funds that have the policy to invest in the SET50 and estimate that the index of SET50 will decline, you can invest in short-term SET50 Index futures that are popular to reduce market losses.

2. Using derivatives for both short futures and long put options

To speculate on the bear market. For example, investors expect the SET50 Index to fall. Therefore, they do the short-term SET50 Index Futures, the active version of S50H23, in which the SET50 index is at 900 points. If the SET50 Index falls, S50H23 will fall accordingly because the futures price will move close to the benchmark price to turn into a profit in the long run.

3. Using derivatives by using Short Single Stock Futures

In the case of diversifying risks to existing shares (single stock futures based on existing shares) or speculating during a downturn in the market, if the comparative stock price is deemed to be temporarily suspended.

In the event of low trading liquidity, investors can contact brokers and use Block Trade as their counterpart. However, the transaction price may not match the trading board price and the transaction cost will be higher because interest and tax (VAT 7%) will be included, so the price will not match the board price

4. Short Sales via SBL Transaction (Securities Borrowing and Lending)

It is to borrow stocks from brokers to sell them on the market, then buy them back when there is profit. Although this method allows investors to make profits in the market, they must be cautious about many things. For example, short-selling must be following SET regulations at the latest price plus one more price. If the borrowed stock pays its dividend, the borrowed shares will be restored to the real owner to hold them for dividends.

Also, anything called borrow must be charged with interest which will be calculated daily. If the stock is not repurchased, interest costs will continue to rise. Therefore, if you are not confident that the borrowed stock will fall, you should not use this method for investment, which will cost more than profit.

5. Short Against Port (SAP)

It is to sell off existing shares and then buy back the existing shares to adjust the price from the lower profitable price. This would be like changing costs to help increase profitability during the stock price rebound.

It must be admitted that it is difficult to invest in a recessionary market. However, by using appropriate investment systems and maintaining long-term guidelines, you can protect your investment portfolio and reap the benefits of investment opportunities, concentrate on the reason why you decide to invest to prepare for challenges, and return to profit when the market improves.

References from
setinvestnow/moneyandbanking