The Case Analysis Of Mingri Holdings Using Entitlement Trade Supports The Development Of Plasticizing Industry In Zhejiang And Shanghai

As China's economy enters a new normal,the benefits of social industrial enterprises have declined to some extent.The prices of international commodities continue to fluctuate violently,especially the price fluctuations of crude oil and other varieties have a great impact on domestic products.In this case,once the enterprises,especially small and medium-sized enterprises,have caught up with large fluctuations in the price of raw materials,it will easily lead to an increase in production costs,which will have a very negative impact on enterprises with low profits.In response,the central government proposed to serve the real economy with financial instruments and make good use of the risk diversification of financial instruments.It is generally believed that traditional futures hedging and other methods can help companies lock transaction prices and avoid price risks.However,in practice,many people find that for various reasons(such as too few futures varieties,different futures trends,margin constraints,etc.),hedging methods are difficult to really apply to enterprises,especially for small and medium-sized companies.For companies,they use few futures to hedge price risk.Under such circumstances,the medium-term association,futures exchanges and even futures companies have proposed various innovative trade models that use derivative products to help entities avoid price risks.The trade with rights has entered the public view as a simple and practical method.Right-bearing trade plays a significant role in helping entity companies to avoid price risks.This article takes Zhejiang Mingri Co.,Ltd.and Shanghai Secco Petrochemical Co.,Ltd.as an example to conduct a trial of trade with rights,and analyzes the overall process of trade with rights in detail.This article first analyzes the principles on which the trading model with rights is based,including hedging theory,basis trading theory,over-the-counter option innovation theory,and copy option theory.Secondly,this article analyzes the parties and the operating mechanism of the case,and studies the benefits after the case is run.It is found through research that the final benefits of all parties in this case are relatively good.Furthermore,this article summarizes the advantages of trade with rights,and concludes that it has certain advantages mainly in terms of transferring price risk,entry barriers,and promoting the development of futures markets.Regarding the shortcomings of trade with rights,two points have also been raised.One is the high requirements on intermediate traders,and the other is that information asymmetry may affect transactions.Finally,this article puts forward some suggestions on how to promote the right-based trade model to better help the real economy.