Risk Management And Control Of Chinese Margin Trading

The margin trading is a derivative foreign exchange tool developed since 1980s. It can consummate the financial market effectively. But because the margin trading has the characteristics of high fluidity and lever rate, it is often used for congenial tool by the risk amateur, and causes heavy loss. Therefore the margin trading risk control is extremely important for the transaction running smoothly and the financial market stabilize.To reopening the margin trading market, and to identify, measure, control the margin trading market risk, adapte to the logic developing process of the risk management. The fresh ideas of this research lies in: First, there are 25 types of margin trading risks by using Failure Tree Analysis and 20 types by using Risk Check List. According to the result of the identification to the margin trading risk, it has obtained the conclusion that the relation of each kind of risk is close and complex. The different departments may face one risk, while one department may face the different risks. The exchange rate undulation is the foundation of the margin trading market existence. The market risk is the most important risk of the margin trading risks. Second, in the process of measuring the margin trading market risk, it uses the value at risk and conditional value at risk methods, collects two groups of the internal and the international foreign exchange market USD/JPY altogether 840 sample data, carrys on the strict computation, and discovers that the international margin trading market risk is higher than the internal market. Once the internal foreign exchange market connected with the international market, it would be facing the giant market risk. At last, based on the risk identification and risk measurement, it designs the feasible control plan for the margin trading market risk control, and provided the beneficial reference for the policymaker.