An Empirical Study On The Impact Of Margin Trading On Stock Market Volatility

Margin trading is also known as credit guarantee transaction,which provides to investors with a tool to avoid risk when the stock market falls and avoid missing opportunities when the stock market rises.However,margin trading is a double-edged sword that it has financial leverage.In order to seek benefits,investors will increase their speculation,which may cause the stock market volatility intensified.However,there is no conclusive conclusion about whether margin trading has an impact on the stock market volatility and whether it is positive or negative.Through the in-depth analysis of this subject,we can provide some reference for the operation of China's margin trading system,and also can enrich the content of this field,so it has important academic value and practical significance.Margin trading has been in practice in the international developed capital market for a long time,and plays an important role in the securities market.Since March 30,2010,China formally launched margin trading system,which put the domestic securities unilateral market operation to the end.The system provide a new tool to the domestic investors,and at the same time,it will also do have a certain impact on the domestic stock market volatility.Since the introduction of margin trading system,just for six years time,the stock market step into the adjustment period after a wave of cattle from 2014 to 2015,the domestic investors have different views on the impact of the stock market by the margin trading system.Under this background,this article analyses the impact of the margin trading on the volatility of the stock market.Foreign researchers have carried out more research on the subject of this subject compared with domestic researchers.This article summed up conclusions,and on the basis,elaborating the significance of this subject,and analyzing the margin trading system on the theory.Through PSM-DID model,the article found the counter-factual framework for the samples of the experimental group,the margin trading stocks,to analyze the subject from empirical,and then get the final conclusion of this paper.This article is divided into four chapters.The first part is the introduction,analyzing the research background,the significance and the overall research results of domestic and foreign scholars on the subject,to prepare for the study.The second part is the theory of the impact of margin trading on the stock market,mainly introducing the definition,the characteristics,and functions and trading patterns of margin trading,and the concept of stock market volatility,and how the margin system affect the stock market volatility.The third part is the main part of this paper.This part mainly uses the PSM method to find the sample of the control group,similar to the experimental group,constructs the counter-factual path by using the DID model,and make the empirical analysis.Based on the previous analysis,the fourth part make a conclusion,and combined with the reality of China,this article puts forward some recommendations about margin trading system in order to make the system play better and avoid excessive impact on the stock market.