Callable Bull/bear Contracts Mechanism Analysis And Future Thinking Into China Market

There is great improvement in China derivate security market since the experiment of option and successful operation of future market. And also new derivate security will be provided in the near future. As a successful one, CBBC has undergone great growth in Hong Kong market so that we are very interested in its reason. This essay aims to study the concept and the feature of CBBC through mechanism analyze. With the statistics analyze we also get the Delta feature of CBBC and explain the reason of its popularity as well as the weak point of the finance cost setting.At last we study the necessity and feasibility of CBBC in China market. Through comparison of China market and other country market, we provide some suggestion for the mechanism and risk management of CBBC in China.In this essay, we conclude it is the main feature to favor in the straightforward market that its delta equals to1.But in the fact almost all CBBC exist the overvalue problem of finance cost which is determined by investment bank. As for the mechanism problem, the first solution is set up market maker.