Risk Management And The Supervision Of Stock Index Futures

Stock index futures act as the most important financial futures in modern financial market. It has greatly influenced traditional securities issues, and also affords system risk-avoid method for stock market. By increasing the liquidity and incentive effect for stock market, the stock index futures make enormous risk to the financial market of the country as well. In the 1990s, international institution investors speculated tremendous profits by the use of stock index futures in the Southeast Asia. At the same time, stock index futures for speculating or arbitraging have aroused severe risk. It caused the financial crisis in some corporations and also in some countries. These financial crises have proved the tremendous risk caused by the stock index futures.The scholars may have realized the high risk of stock index futures, but how many kinds of the risk existed in stock index futures? How do the supervision committees enact laws and institutions to protect the safety of financial market in China, especially for the protection of property rights of private investors? According to the law and economic theory, the instability of institutions will increase the transaction costs, and also will lead many rent-seeking. Therefore, what is the main principal for the supervision committee to manage the high risk financial derivatives?I , The styles of risk for stock index futuresAccording to the there are five styles of risk for the stock index future :( i ) market risk. It also can be defined as price risk, which means the price of stock index futures change in the opposite direction, and...