Research On The Impact Of Margin Trade On The Stock Market

The introduction and operation of financing and securities loan system is an essential reflection of the creative development in financial market of our country.Since the CSRS(China Securities Regulatory Commission)bring in the brokerage pilot to develop financing and securities loan,transaction about it has been improving day by day.Meanwhile,the stock market has been gradually affected,especially it's liquidity and volatility,by the operation of financing and securities loan.However,compared with the advanced information system,relatively completed derivative financial supervision and professional investors in developed capital market of western countries,the development process of financing and securities loan in our country still has a long way to go and it's effects on the stock market are still not that clear.That's why that it is necessary to bring in quantifiable assessment indexes to verify that whether the effect mechanism on stock market from financing and securities loan transactions is reasonable in our market from the practical aspects.From practical analysis,we can farther conclude the limitations of the effect mechanism on stock market from financing and securities loan transactions or definite the deficiencies during the development of financing and securities mechanism in our country.On the basis of this,we would be able to put forward effective suggestions to normalize the transactions decrease the liquidity and volatility of stock market and lower the risks as well.This essay is mainly conducted in the following thought: raise the question-analyze the question-solve the problem.It will be based on the comparison about financing andsecurities loan mechanism between eastern and western countries and point out some existing advantages of our country.At the same time,using the analysis of “Changjiu Biochemistry” incident,can help clear those problems existing in the transactions of financing and securities loan.After the analysis,we may figure out the effect mechanism on stock market from it by referring related theories,especially pay more attention to the application of those transactions to investment strategies,the essay is going to interpret the effect mechanism on stock market from fictitious transactions.Through research hypothesis,proper model,variable and sample statistics,on the basis of the transaction statistics of Shanghai and Shenzhen stock markets from September 2015 to September 2016,I will do VAR estimation,Granger causality test and impulse response to evaluate the effects from financing and securities loan on market liquidity and combining the conclusions with the national policies and market situation,I am going to come up with my own suggestions on how to standardize the financing and securities loan development,reduce risks and adjust it's effects on market volatility and liquidity in order to ensure a more healthier development of stock market in our country.Through the whole research,I have got the conclusion that the formation and development of financing and securities loan mechanism in the result of satisfying the diversified requirement of investment project from investors to form a bilateral trade system.The financing and securities loan mechanism has been developing well in western countries and plays an important role in diversifying investments on stock market capital.Comparatively,the functions of this mechanism does not work that well in China and we still need to further improve the development environment to make it more orderly.