China To Launch Stock Index Futures Necessity And Risks Of Research,

Stock market plays more important role in national economy. At present, total market capitalization of China's listed companies takes 50% in GDP of China. It exists series ofproblems like big system risk, lack of financial derivatives, unhealthiness of market function mechanism in China's stock market, as a long position one, which restrict the development of stock market.As one of important financial derivatives, Stock Index Futures could find true value and be used for hedging, and become an effective tool for preventing risks. Stock Index Futures has a very fast development, and it has become a most important financial tool. However, China has no Stock Index Futures yet, which will be harmful for the development of capital market and improvement of international competitive capacity. Establishing Stock Index Futures will accelerate the development of China's securities market. But because the spot market is still juvenile and it has no powerful law protection, so we must try to solve the problems. Establishing Stock Index Futures is a necessity and has enough possibility.However, trade of Stock Index Futures will face big risks because of its high levering and liquidity, so risk management of Stock Index Futures becomes the key spot of whether Stock Index Futures could work well. With global financial markets growing, theoretical research went deeper and deeper, such as Markowitz's diversification theory, William Sharpe's CAPM, and the most popular VaR. All the growth of the theories can guide us defending and avoiding from risks well. This paper, based on risk management theory, has done a research on risk management of Stock Index Futures.