The Impact Of The Circuit Breaker On Market Transactions

The Circuit Breaker is a market protection mechanism.Nowadays,in the world,many countries and regions have implemented different types and ranges of Circuit Breaker in their securities markets.But such a mechanism that plays an important role in other countries has failed to be implemented in China for four days.As for the Circuit Breaker,the academic circles have been controversial about its advantages and disadvantages.This article analyzes the development of the Circuit Breaker and sums up the research of domestic and foreign scholars,and analyzes the impact of the Circuit Breaker on the stock market in China using natural experiment methods.The two trading days in which the melting was conducted were selected as the experimental group.In 2015,the three CSI indices fell more than 7%on the trading day as the control group.Using the intraday high-frequency trading data,the linear regression model was used to conduct specific research on the melting mechanism for the market.Select the order imbalance,withdrawal ratio,relative effective price difference,and order size indicator for specific analysis.Finally,it is concluded that exponential melting does not really lead to Circuit Breaker,which can be seen from the unbalanced orders and improved liquidity of one order;on the other hand,the fuses have exacerbated Circuit Breaker of market manipulation mentality which can be seen from the imbalance of orders and the imbalance of withdrawal orders.On this basis,the paper will also analyze whether the Shanghai and Shenzhen 300 stocks are used to classify and analyze the sample and introduce cross-variable variables such as stock index futures trading and margin financing to confirm that these factors will also affect the magnetic attraction effect of the fuse mechanism.