Could GamestopStyle short-ball speculation in the Chinese stock market?
There could be market frenzy in the US last week Inspired China’s crypto community is betting more dogecoin (Dogs) And Bitcoin (BTC), But even daring traders are unlikely to try to imagine this kind of short-selling speculation on Chinese stocks.
“Chinese financial regulators are closely monitoring what is happening in the Chinese stock market. Retail investors involved in large-scale malicious abortions could be jailed, ”said Jason Wu, CEO of cryptocurrency provider Definer.
“The market cap in China’s crypto market is extremely small compared to the Chinese stock market, so all authorities are keeping an eye on stock market catalysts,” Wu added.
On the Shanghai Exchange, one-third of the shares of shares of mainland China-based public companies were wiped out within a month, and more than half of the listed companies filed for closure to prevent further losses.
The cause of the historic fall remains unclear, but some prominent economists have blamed short-sellers for the crisis. Short seller A stock bet they sell will lower the price.
“It is Margin trading And the short sales that hit the bull market before  The market crash, “said Shuwei Liu, a researcher at the Finance Research Institute at Central University’s Finance and Economics, on July 7, 2015. Op-ed The headline, “Chinese Stock Short Shellers Should Be Heavyly Punished.”
“The stock is still an emerging market. The CSRC does not have the power to control leverage instruments, “Liu wrote at the time.” In this situation, we are offering a weapon to short-sellers to start selling short of this illegal stock. ”
Central Bank Accused Foreign financial institutions manipulating the market by shortening a large amount of Chinese stocks meant that US investment bank Morgan Stanley caused some trouble in the Chinese stock market.
“If Chinese retail investors are able to manage technically small short-term stocks, financial regulators have no chance of something like a gamestop short skid in the Chinese stock market,” said Definer’s Wu.
Arranging gamestop promotions for Chinese retail investors will be a logistical challenge. A key player in GameStop Story is the social media platform Reddit, where anonymous users can meet and discuss short strategies on undervalued stocks.
The majority 177 million Chinese retail investors, who hold 26%% of the total Chinese stock market value, communicate with each other in groups on domestic social media platforms such as WeChat, QQ or Weibo, where moderators can Sensor “Invalid content” on platforms.
“Unlike many tech-savvy crypto traders, many retail stock investors do not have access to VPNs or any other form of encrypted messaging apps, such as Telegram or Signal.” “I can’t even imagine that a huge number of people would be allowed to talk about shorting stocks in public forums like Zhihu,” the Chinese replied in Reddy.