| In 2010,China launched the first financing margin business,which ended the unilateral trading mode of our stock market,and the first time in China's stock market can be carried out in short selling operation.Since the financial margin business played an important role during the period of the big bull market and the crash during 2015 to 2016,this paper focuses on the discussion and study of the effect of margin trading on the liquidity and volatility of China's Shanghai 50.At the same time,we also discuss the emotional recovery period after the stock market crash and the role of margin trading in the "beautiful 50" market.This essay introduced basic concept of margin trading,reviewed the development of China's margin trading and SSE 50 Index,analyzed the domestic and international literature on margin trading.In addition,this essay applied time-series analysis methods to research the effects of the margin trading on the liquidity and volatility of the SSE 50 Index during different time periods.It is found that the effects of margin lending on the SSE 50 Index during different time periods are different.During the bull market and stock market disaster period,margin trading can help improve liquidity and reduce volatility in short term while reduce market liquidity and increase market volatility in the long term.In the transition period of market sentiment,the influence on the volatility and liquidity of the SSE 50 Index is insignificant.During the “Pretty 50” market,margin trading will increase the liquidity of the SSE 50 Index and reduce the volatility of the SSE 50 Index.On the basis of the in-depth analysis of the results of the full text,we mainly pay attention to the two angles of liquidity and volatility,and put forward suggestions and suggestions on how to build a more perfect and efficient margin financing system.It has a certain degree of significance for the further reform of the margin trading system. |
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