On The Stock Index Market In China

Since the 1990s, with the globalization of international capital flow, institutional investors have gradually become the masters on financial market, which demands more for risk management tool and means. Under this background, stock index futures appear in both developed security market and emerging security market, and in this way the worldwide stock index futures upsurge has appeared. Since the stock market in china has just been set up for more than ten years, it's underdeveloped and imperfect market and Irregular market behavior makes stock price often fluctuate violently meanwhile its systematic risk is very surprising. Therefore, there is a great demand to develop Stock index futures as a kind of financial instrument that can evade the systemic risk of stock market effectively in china. Especially after entering 2001, with the introduction of the open-ended fund, the increasingly growing of risk of stock market, the entering of social insured fund to security market and china's entry into WTO, it's more necessary to introduce the stock index futures. Then, should we introduce the stock index futures in china? What kind of influence it may bring to spot market if we develop stock index futures? How to dispel effectively the negative effect brought by stock index futures? These questions are all important problems that can't be avoided in the development process of financial market in china.By introducing the general law and basic theory of futures,applying theoretical research and empirical studies and learning the experience from developed market and emerging market, the article studies the influence on the spot market by introducing stock index futures, and proposes relevant recommendations on decision,design and supervision for development of stock index futures market.This paper can be divided into five parts altogether:The first part is about the basic theory of stock index futures which includes characteristics,growing and development,developing background,development status and function of stock index futures. It's function includes the function of risk shifting,sthe function of price discovering,the function of assets disposing and so on.In the second part, the author tries to explore the latest characteristics and development trends of stock index futures after search on development status of global stock index futures in order to discover it's internal logical relationship and objective law.In the third part, the author explains in detail the necessity and feasibility of developing stock index futures in china. On one hand, the author points out that the development of stock index futures is necessary for healthy development of stock market,for perfection of market system and for prosperity of stock market and futures market in china. On the other hand, the author points out that software and hardware facilities in the stock market in china have already been qualified to develop stock index futures at present. Finally the author states the disadvantageous factor for development of stock index futures.In the forth part, the author describes initially financial effect the stock index futures may bring meanwhile the author analyses the positive and negative influence it may bring.In the last part, the author analyses the risk management system and measure we should apply from international advanced experience while developing stock index futures. Then from the angle of risk prevention, the author puts forward some suggestions so that the stock index futures will be operated smoothly in china.