A Research On Risk Management Of The Business For Margin Trading In R Securities Company

Margin trading, a typical mode of deal on credit, with its features of leverage and short-mechanism different from normal securities transaction, not only brings securities companies with more profits arising from innovation, but also make them face greater risks while doing the business. Thus, how to manage and control these risks effectively becomes the primary issue for relevant regulatory authorities and securities companies when designing margin trading business rules. Effective risk management includes two aspects: first, whether the risk management design can effectively evade or decrease likely loss from risks; second, how to tradeoff the relationship between risk management and economic benefit, how to maintain the justice, stability and health of market development, and how to enhance the utilization of capital by designing useful trading rules. Therefore, the research on rationality of risk management rule design of margin trading has its important practical significance.At the beginning, this thesis briefly introduced relevant theoretical knowledge of risk management and margin trading rule system in our country. Taking R Securities Company as a research object, the thesis illustrated securities companies'general operation on organizational structure and system design on margin trading risk management. On that basis, the thesis attempted to apply new risk management knowledge to analyze and research on the rationality of risk management system design. Besides, the thesis pointed out the shortages of risk management and system design of margin trading under current market monitoring system frame and further analyzed the weakness of basic market trading system of margin trading designed by regulatory authorities.The research method mainly applied in the thesis to validate the rationality of R Securities Company's important risk management indexes is VaR of Historical Simulation method. As a result of this research, the conclusion was achieved on three aspects:first, the risk management system of R Securities Company was able to sufficiently withstand any kind of risk in current market; second, the risk management system of R Securities Company was too strict, which was evidenced by high capital threshold which restricted the involvement scale of investors, and high margin level and low stock collateral loan ratio which was neither good for investors to give full play of capital efficiency nor for the securities company to enhance the economic benefit. lastly, through the research on R Securities Company's risk management system of margin trading, the thesis further indicated the shortage of authority regulations on margin trading. The current system and regulations not only cannot protect the legitimate rights of numerous investors efficiently, but also are actually detrimental to the interests of smaller investors and is not conform to the principle of "Fair, Open and Just".