The Research On Stock Index Future Hedging Of Wen Ying Company

The stock index futures are products of modern capital market. With the dissolution of the Bretton Woods monetary system and outbreak of the oil crisis in the world in the 1970 s,economic structure and stock market became volatile. Investors urgently needed a financial instrument that can avoid systemic risk and maintain the value of assets.Although stock index futures are more than a century later than the introduction of commodity futures, stock index futures show the shortest history and fastest development among the financial derivatives. In the early launch of stock index futures, most people blamed Black Monday in 1987 to stock index futures, because investors did not understand, and the supervision system was not perfect. They thought the stock index futures can not hedge assets,evade risks, and even be questioned because of the high times leverage, the prevalence of speculation. But the stock index futures were still inevitably in its gradual development and improvement. In subsequent decades, with the maturity of investors and the strengthening of market regulation, the United States, Britain, Singapore and other countries firstly launched the stock index futures, and their stock market ran more smoothly than the countries which didn’t launch that. So the risk aversion effect of stock index futures has gradually emerged.Fresh thing breaking through the old pattern always need time and pressure. It can not be denied that is during 30 years after the introduction of stock index futures, the global trading volume of stock index futures reached a quarter of all futures trading, quickly exceeding all commodity futures trading volume. The stock index futures are known as the greatest financial innovation in the end of the 20 th century.Firstly, this paper clarifies the concept of stock index futures, hedging, the Shanghai and Shenzhen 300 stock index futures and others relevant theories. Secondly, the paper introduces the global leading stock index futures markets, such as the United States, Britain, Singapore,Hong Kong, and describes China’s current situation of stock index futures market. The systematic risk of the China’s stock market is declining, but still far higher than that of the developed countries, such as Wen Ying financial company, which is lack of effective hedging instruments. The Shanghai and Shenzhen 300 stock index futures, introduced over 6 years, runs smoothly, and highly fits for the spot price, achieving its function of risk aversion very well.Finally, the paper detailed analyzes preparatory work, the specific operations, and the later performance evaluation of Wen Ying financial company stock index futures hedging process.Compared to Hong Kong mature capital market’s advanced concept and the implementation steps, the paper finds out the problems existing in the hedging strategy, sums up the methods toimprove the effect of hedging, and put forward suggestions for perfecting Wen Ying company hedging process and china’s stock market environment.On one hand, the paper fined out problems and the erroneous zone Wen Ying financial company’s hedging, combined with analysis of foreign mature markets, to perfect each stage of hedging and sum up the general rules of the industry, which helps the institutional investors fully understand analytical process and hedging idea, effectively allocate assets combination,strictly control risks, and make reasonable investment decisions. On the other hand, the paper can help the investors, who don’t come into contact with the stock index futures, correctly understand and use stock index futures, delightly accept and endorse the stock index futures, in order to promote securities market’s healthy and stable development.