The Analysis Of The Margin’s Impacts On China’s Securities Market

In overseas markets, margin trading system has been a common practice, the pilot margin trading business in A-share market has been launched since March2010, but the imperfections of the margin trading system has seriously hampered its development, compared to mature markets overseas, The margin trading scale is still low. A-share market was officially launched refinancing mechanism on August31,2012, so that the A-share market margin trading system will been further improved. This would promote the margin business of the A-share market into a new stage of development, especially the improvement of the short selling mechanism will have a revolutionary impact on the A-share market.This paper first introduces the margin profile and several classic margin trading mechanism to explore which is the best margin trading mechanism for the A-share market. Then, combining the macro-level institutional innovation of the margin trading and micro-level market participants to analyze the impact on China’s securities market from three aspects:the stock market index, securities companies and investors. Finally, make a summary about the impacts on these three aspects.The main conclusions of this paper:The Granger causality tests show: the change rate of HS300index does Granger Cause the change rate of margin,but the change rate of margin does not Granger Cause the change rate of HS300index; margin can improve the income of commission and interest for China’s securities company, and help them getting rid of the profit model of "food dependent on the weather";The characteristics of short selling and leverage of the margin trading give investors a diversified investment strategies and new profit models, even brings for individual investors,institutional investors and even the entire market of financial innovation platform.