Research On The Effect Of Margin Trading On The Volatility Of China's Stock Market

Margin trading refers to the behavior of an investor to pay a certain margin to a securities company with a margin trading qualification and to borrow money from the securities company to buy or borrow securities to sell.As an innovative trading tool in China's securities market,financing margin trading not only enriches the investment channels of the market,making it possible for investors to carry out the short selling mode through the securities companies.At the same time,the production of margin trading means the end of the era of unilateral transaction in China's securities market.The age of formal entry into bilateral transactions.The introduction of this new market transaction mode has no doubt that it is of great significance to the development of China's securities market and the improvement of market trading mechanism.However,the effect of margin trading on the volatility of China's stock market has stabilized the volatility of the market or aggravated the volatility of the market or there is no obvious correlation between them.So far,the academic circles have not come to a unified and definite conclusion.Some scholars believe that the margin trading can affect the supply and demand in the stock market by its leverage effect,and the stock price can be returned to its intrinsic value in time,so that the volatility of the stock market can be suppressed.However,some scholars believe that because of the more serious speculative atmosphere in China's securities market,a large number of speculators in the market use margin trading to conduct improper operations and increase the volatility of China's stock market.Due to the differences between the research objects and the research methods adopted by the existing scholars,the conclusions obtained by different scholars are not consistent.And what is the relationship between margin trading and stock market volatility? Is it calm? Or is there no correlation? It is worth our further exploration and analysis.In view of this,this article combs and classifies the important research results and conclusions about the relationship between the margin trading and the stock market volatility,and defines the related concepts such as the margin trading theory,the stock market volatility theory and the margin trading theory,and combines the theoretical analysis and the empirical analysis.Methods to study the relationship between them.On the basis of empirical research,this paper divides the different operating states of the stock market according to the Shanghai and Shenzhen 300 index in China's stock market,and divides the different market running states of the stock market since the stock exchange trading is carried out into the rising period of the stock market,the decline period of the stock market and the shock period of the stock market,and through the adoption of the VAR model.The empirical study shows that the margin trading is the Grainger cause of thestock market volatility,and there is a certain correlation between the margin trading and the volatility of the stock market under these three different market quotations.In order to further explain the impact of margin trading on the market at different stages of the stock market,this paper makes a comparative analysis of three groups of stock groups,stock group,stock group and non financing margin trading group.The margin trading intensifies the volatility of the stock market on the whole,but the margin trading intensifies the volatility of the stock market,which has a stage characteristic.After the trend of the bull market and the bear market,the margin trading intensifies the volatility of the stock market.In the case of the stock market in a shock market,margin trading to some extent,stabilize the stock market volatility.Finally,on the basis of the conclusion of the research,this paper puts forward relevant policy suggestions,such as the establishment of the total amount mechanism of margin trading which is opposite to the stock market rise,design and increase the supply of margin trading securities,improve the mechanism of the exchange,and so on.It can be used for reference in the development of China's securities market and the relevant regulatory authorities.