Study On Margin Transaction Impact To Operation Performance Of China Securities Market

Margin Trading, as a kind of innovation mechanism security markets, was introduced into Chinese market on March31,2010.It has broken up the limitation of the only way of long unilateral position, and would have far-reaching meaning on Chinese stock market. Whether the margin trading has any impact on China’s securities market? Does it play a basic function in stabilizing market volatility and improving market liquidity? At the same time, with the increase in the margin of the underlying securities, the margin is transferred to the regular phase. People also pay attention to that how "Refinancing" mechanisms play a role in security markets.The main contests of this paper are as followings:This paper firstly qualitatively analyses the basic concepts, characteristics, functions and negative impact of margin trading. Secondly the paper introduces the evolution process of the margin trading mechanism, and compares some main kinds of mature models of margin trading system overseas. Meanwhile, the paper puts forward some suggestion to set up and prefect Chinese margin trading mechanisms. Thirdly, the paper use theory research methods to analyze the effects of margin trading on the market. To compare the influence that margin trading on the Shanghai and Shenzhen stock market performance, this paper analyzes the long-term relationship and causality between margin trading and the Shanghai and Shenzhen stock markets, volatility and liquidity by the OLS model and the Granger causality test. When the stock market is in a different market, the long-term relationship between margin trading and the Shanghai and Shenzhen stock markets, volatility and liquidity will have corresponding changes. Finally, the paper analyzes the risks control issues of margin trading.Margin credit mode selection and the impact on the market has become the important thing of regulators and investors, The research results will provide an important basis of decision making for China securities supervisor how to rationally deal with margin trading mechanism to enhance operation performance of securities market, which will possess important theoretical and practical significance to maintain a healthy, stable and sustainably developing securities market.