Study On The Impact Of The HS 300 Stock Index Future Over The Stock Market Of China

Stock index futures, once launched in the 1980s, boomed the stock market of United States and the world. It does not only avoid the risk, reduce the volatility of the stock market, improve liquidity and the securities market structure, but also increases financial derivatives and the asset allocation methods. Considering factors such as the risk aversion function and the situation of China's stock market, regulators launched HS300 stock index futures in April 2010.Based on the study of related literature at home and abroad, the research method of this paper mainly relies on empirical analysis while normative and qualitative analysis is subsidiary. Firstly, the definition of stock index future and its functions are described and the history of its development is reviewed; Secondly, the paper summarizes and discusses the related results of the impact on volatility and liquidity of the stock market based on the launch of stock index futures at home and abroad. Moreover, this thesis selects transaction data of HS 300 index after the release of the index futures for the study, using GARCH model to analyze the impact on volatility of the stock market before and after the launch of trading. At the same time, indicators of volume, relative spreads and turnover rate are used to analyze the liquidity of the stock market, thus explaining the changes. Above all, this paper draws the following conclusions:After the launch of stock index futures, the volatility of underlying index is actually weakened; the liquidity of HS 300 stock index and Shanghai composite index is improved,but liquidity of weight shares of HS 300 stock index are not generally increased. In the end, advices are given, supervision department and the market parties should be strengthened, so as to promote the healthy and stable development of our country's financial derivatives and the capital market.