Prospects For The Development Of China's Stock Index Futures Market

Nowadays the stock index futures trading has entered the simulation stage and is likely to be introduced in 2008 in China, so the discussion of the stock index futures has become the hot topic in the theoretical circles. Based on the domestic and international research in the past, and with the help of the practice I have learned, this paper combined the quantitative analysis and the qualitative analysis to discuss the relevant contents of the stock index futures from five sections. Through the conclusions of the author's empirical analysis, and with the combination of the characteristics of the domestic security market and future market, this paper focused on the forecasts about the launch of the stock index futures, and gave us a number of policy recommendations in a targeted manner. With the help of the hard work in the theoretical and practical learning, the author tried his best to make the paper play an important role in the generation and development of China's stock index futures. In this paper, the specific structure is as follows:Chapter 1, Introduction. In this section, the author mainly described the background and significance of the topic. And then set out the literature review of the domestic and foreign scholars in the related fields in detail. At last, the paper pointed the innovation points compared with the previous research.Chapter 2, The outline of the stock index futures. This chapter discussed in detail about the concept, function, mechanism and characteristics of the stock index futures. Besides, this chapter also described the development history and current situations of the international stock index futures, and the significance and impacts of the building of China's own stock index futures market. Chapter 3, Empirical analysis. In this chapter, the author selected the daily closing price of the Nikkei 225 index as a series of benchmarks, after simple changes and statistical description, using GARCH model to return D1, D2, D3 three factors to verify the impacts of the introduction of the three stock index futures on the Nikkei 225 index respectively.Chapter 4, The forecasts on the establishment of China's stock index futures market. This section is one of the core chapters in the paper. In the first part, the author analyzed in depth about the controversial issues of China's establishment of the stock index futures market. Including the lack of selling mechanism will whether restrict the market funtions or not, the problem of"maturity"effect, the introduction of the stock index futures market will whether lead the funds diversion or not, and the internal risk control for institutional investors. In the second part, the paper gave us a bold prediction on the introduction of the stock index futures, such as the transaction size, trading practices, the impacts on the security market, the choice of regulatory model, as well as the far-reaching impacts on the financial derivatives markets. In the last part, the author put forward three policy recommendations according to the analysis above.Chapter 5, Review and outlook. The author summed up the paper on the basis of the chapters above, pointing out that based on the existing conditions and planning step by step, there are more advantages than disadvantages for China to launch the stock index futures market, which will be a milestone for China's capital market. Finally, the paper pointed the direction the author needs to study in the next step.