The Assessment And Prevention Of Market Risks Of Securities Margin Based On VaR

Since the margin trading was approved in March2010, the profits of margin havequickly become one of the top five sources of testing securities companies. The margintrading provides margin securities companies with a platform of short selling trading, and alsoenlarges the market risk of the securities companies. VaR, a tool of risk management used inforeign securities companies and other financial organization to prevent Margin from marketrisk, has been adopted in the domestic securities companies to limit the risks from traditionalbusiness. Extensive securities for the risk management of margin, such as the strict marginsystem, have been unable to meet the requirements of the rapid development of the securitiesmarket.As a newborn in China, the market risks of margin securities firms have not beenconceded. the research literature on the assessment and prevention of market risks of marginsecurities firms remains purely qualitative analysis. Therefore, by the view of the marginmarket risk assessment and research status from securities companies, VaR as a sophisticatedfinancial management tool should be used for market risk assessment of Securities Margin. Inaddition, new margin trading has last two-and-a-half years, which forms numerous historicaldata to reflect the market risks of securities firms. In this paper, the theory of risk managementand VaR risk management tools is used to assess the market risks of margin and providesome recommendations from the perspective of the securities companies; its main contentsare divided into following five sections:Introduction as the first chapter mainly contends the research background, significance,literature review, research ideas and innovations.The market risk assessment theory of securities margin trading is discussed in the secondpart, which mainly includes the connotations, characteristics and assessment methods of themargin market risk.In the third part, the assessments and prevention status of the margin of the securitiescompanies is introduced exhaustively. Furthermore, there are comprehensive explanations forthe problems and their causes of the margin of securities companies.In the Part IV, Hongyuan Securities, CITIC Securities and other three stocks and theShanghai Composite Index are cited as experiment securities, which used to analyze the market risks of single margin and portfolio. In addition, the results of the assessment ofmarket risks are applied effectively.The recommendations, such as warning mechanism of margin market risk, controlprocesses and assessment tools, are introduced for securities companies to prevent the marketrisks of margin trading in the fifth part.