Research On Risk Control Of Margin Trading In ZT Securities Company

Just five years, margin trading business has made rapid progress in China. The margin trading business has acted an active role in improving market trading mechanism, regulating market operation, increasing investment channels and risk-averse approaches for the investors, and enriching business varieties and increasing gains for securities companies, etc., and also aroused considerable risks. Under the circumstances where the continued development of margin trading business is inevitable, as one of the most prominent participators in margin trading business, the securities companies are bound to experience deteriorating development if they fail to effectively handle such risks.But, after a careful survey of the existing literature, we are unfortunate to find that there are hardly any researches that are relevant to the practice of risk control of securities companies themselves. Therefore, what we have presented in this paper, namely, the problem of dealing with the risks of margin trading business from the angle of securities companies with the practical operation experiences of ZT as our basis, obviously has far-reaching implications both in theory and in practice.In this paper, first of all, offered a brief introduction of the concepts, the business processes, the characteristics, the prerequisites and the functions of margin trading business, and we found that such features and functions on one hand determine the necessities to carry out margin trading businesses, and on the other hand lead to the various risks mentioned above. Later, with accordance to the practical operation experiences of ZT Securities, we sorted out the various potential risks that would be probably encountered, and figured out their possible causes and characteristics, and all these efforts undoubtedly provided insights when discussed the proper risk countermeasures. Later, based on the previous research, according to the current situation of the existing risk control system of ZT Securities, we offer a practicable proposal for ZT Securities in risk controls. And last but not the least, we also discussed several safeguards which are crucial to the effectiveness of the above proposed risk control schemes.