Research On The Margin Trading & Short-selling Transaction Of The Securities Companies In China

Margin transaction is a mature system widely adopted in security markets abroad, which brings many active effects, such as advancing security liquidity, mitigating market volatility, pricing and meeting different needs of investment and risk preference,forming reasonable prices and making profits for the investors. It is all important approach to improve the market mechanism, promote the financial innovations and optimize the disposal of resources.So we can reach a conclusion that the financing & short-selling transaction is not only the need to fit in the international security markets, but also the requirement of Chinese security market itself. Carrying out financing &short-selling transaction is an important way to promote our security market. It has crucial significance for Chinese security market to build up the margin transaction system at the right time.The foremost problem to be solved is what influence would be if develop the margin transaction, which is also the focus in theory research and practical operation areas.After making comparison and research on four typical margin transaction systems in security markets of USA, Japan, Taiwan, and analyzing the data of the security market since the regulation of the financing & short-selling transaction is allowed, this paper brings an opinion that at the experiencing period of developing the margin transaction,both the number of the investors and the volume are increasing, while there are difference between the trend of financing transaction and short-selling transaction. We could see the margin transaction has influence on stabling the security market, however, did not do very well on advancing security liquidity, pricing and so on because of the recession around the security market.