Research On The Development Countermeasures Of Margin Trading In GF Securities Company

The margin trading, which is also known as security credit trading, refers to the activitythat the investors provide collateral to the security company, which is qualified to carry outmargin trading, then the investors use the borrowed money to buy the stocks or sell theborrowed stocks. The margin trading business refers to the operating activities that securitycompany lend money to investors for buying stocks, or stocks for selling, as long as thecompany get the collateral from the investors.The margin trading is a mature trading system which is carrying out abroad. Nowadays,most mature and emerging markets allow margin trading. It can be seen from someinformation that compared with the total trading volumes, margin trading volumes are asfollows:16%-20%of America,15%of Japan, and20%-40%of Taiwan.In China, margin trading is an innovational business in security market. Shanghai andShenzhen Stock Exchange accepted margin trading declaration in March31st,2010, whichmeans the margin trading entered operating stage officially. Totally, margin trading inChinese market operated well and smoothly. The operations got the recognition such as: thegrowing scale of security company, the further improvement of capital market, stabletechnique system, and controllable risk which achieve the frame of “testable, controllableand sustainable”. However, the margin trading brought opportunity, as well as challenges.The article takes one of the pilot securities companies——GF Securities Company asan example, studies from operating and risk controlling sections, analyses the positiveinfluences on earnings, business model and business innovations through the transactionmodel and development of the business. In the meanwhile, analyses the potential risksaccording to the existing probloms with the development of margin trading in GF SecuritiesCompany. The article raises the relevant countermeasures, proposes the reasonablesuggestions and measures. With the unceasing study and reformation, the GF Securities Company will draw on the foreign experiences as well as the current situation of oursecurities market, promoting the ability of the business innovation and connecting the tracksto the international model.