Research On Margin And Insider Trading

In March 2010,China's capital market began to pilot the financing and margin trading system.A shares opened a two-way trading system,saying goodbye to unilateral long.As a special way of securities trading,will margin trading be used by insider?After reviewing the relevant literature,this paper finds that the introduction of margin trading system has both advantages and disadvantages to the securities market,especially foreign scholars think that margin trading may be used for insider trading.However,due to the late introduction of margin trading system in China's securities market,there are few studies on the relationship between the introduction of margin trading system and insider trading in China.Firstly,this paper analyses the related theories of margin trading system and insider trading,and then analyses the mechanism of insider trading using margin trading.When the profit of insider trading is greater than the transaction cost of using margin trading and the cost of purchasing insider information,insider trading may be used by insider trading.Securities are traded insider.Then,this paper makes an analysis and Discussion on how to judge insider information insiders using margin trading,and concludes that insider information insiders should use margin trading to conduct insider trading from two aspects:abnormal turnover rate and excess return rate.Then it introduces the basic status of A-share market and margin trading business in China.Then it selects 13 years'data of Listed Companies in China from 2005 to 2017.uses the event study method to take the period of quarterly report disclosure as the window period,and successively takes the average turnover rate or excess return rate of the window period as the explanatory variable.The amount of margin trading is the explanatory variable,such as company size,stock price,stock trading volume.and so on.Stock returns and the number of years of listing are the control variables.The research group is the stock of margin trading subject since March 31,2010,and the control group is the stock of non-margin trading subject in A-share market.Through descriptive statistics and analysis of 112 268 sample sizes,it is concluded that margin trading promotes insider trading of listed companies.Finally,according to the empirical analysis,policy recommendations are put forward.