The Impact Of Margin Trading System On Asset Prices

So far,the margin financing and securities lending business has been operating in China's securities market for more than nine years,and all aspects have made great progress,which has played a positive role in promoting and improving China's capital market.However,the views of the community on whether the margin trading mechanism can restrain the asset price bubble in China's securities market are not consistent.On the one hand,the margin financing and securities lending system,as a financial innovation tool,has a very positive effect on improving the efficiency of market resource allocation and optimizing the quality of securities transactions.While restraining the bubble of asset prices,the system can also enhance market vitality,reduce the volatility of stock prices,and achieve the goal of stabilizing the securities market.The two business is therefore seen as an important means of achieving reasonable pricing of assets.On the other hand,due to the serious speculative atmosphere,the margin financing and securities lending system may become a booster for the stock price to rise or fall,which has aggravated the volatility of the securities market.In addition,the trading entities of China's margin financing and securities lending business are mostly retail investors.Such traders often suffer from social changes,personal mentality and cognitive bias when making decisions.From the perspective of behavioral finance and cognitive psychology,the difference in cognitive ability will lead investors to form heterogeneous beliefs,which will affect individual decision-making,and ultimately affect the securities market.Based on this research background,this paper introduces the core variable of investor cognition ability in the research of margin financing and securities economics,and distinguishes the differences of individual cognitive ability through classical cognitive ability test,and observes different cognitions.The trend of changes in the price of securities under the market to determine whether the margin financing and securities lending mechanism affects the bubble of asset prices,the volatility of stock prices and the liquidity of the market.This is one of the core issues in this paper.In addition,as a restrictive system for margin financing and securities lending business,the appropriate ratio plays an important role in maintaining the stability of the securities market.Therefore,this paper also studies the impact mechanism of the rising cost of financing or securities lending on the securities market.With regard to the study of economic issues in the margin financing system,empirical testing has always been the main research tool in academia.However,experimental economics,as an emerging research method,has the advantages of controllability,comparability and repeatability,which can better compensate for some aspects of the empirical method and form an important supplement to the empirical test.Therefore,this paper refers to Smith's classic experimental design,uses the experimental economics method to construct the securities market trading environment,recruits real actors,and conducts securities trading through the oral two-way auction mechanism.In order to simulate the real market,each of the three experimental people was given different initial assets,including a certain amount of book cash and securities,before the start of the experiment to observe the decisionmaking behavior of the real agent in the presence or absence of the margin financing system.Based on experimental research data,this paper uses descriptive statistics,independent sample T test,non-parametric test and multiple regression to analyze the main methods,mainly draws the following conclusions:First,under the margin financing and securities lending system,the market can fully reflect the expectations of bulls and bears.Whether it is a high cognitive ability group or a low cognitive ability group,the securities prices are more stable.Second,the higher the investor's cognitive ability,the smaller the asset price bubble,the lower the cognitive ability and the greater the price volatility.The establishment of the margin financing system can significantly reduce the price bubble and stabilize the asset price.Third,the margin system is an effective tool for regulating the securities market.After the increase in the margin of margin financing and securities lending,it restricts speculation and significantly reduces market volatility.