The Role Of Margin Trade In The Stocks Crash Of 2015 And Its Advices

Stock market crash was a major event in the history of the development of China's securities industry in 2015. When the China's stocks hit its highest point of 5178-point in mid-June, and in the next two months, experienced a cliff-style volatility fell until mid-August fell to its lowest point in 2850, the stock markets of Shanghai and Shenzhen evaporated to half its value, it is really a "stock market crash". In the course of the stock market crash, the margin trading system play the important role which is introduced in 2013. Securities margin trading is the generic terms of financing transactions and securities lending transactions, the investors provide the collateral to the company which have the business of the Securities margin trading to borrows money to buy securities (financing transactions) or borrowing securities and selling (short selling) behavior. Namely that the nature of financial intermediation is the funds, while margin trading investors rely on credit guarantee loans to obtain capital investment securities, securities markets is the inevitable result of financial development. Generating margin trading promoted the stock market, it provided the investor who lack money and have the ability to repay the loan the opportunity to attend the further investment of the stock market. However, margin trading has the certain leverage, and stock market investment is inherently high risk, margin trading of investment securities also have a threat and potential risks to the stability of the market and the investors. The stock market crash in 2015 is the result of the leveraged funds rushing in and out of the stock market. In this paper, the role of the margin trade in the 2015 stock market crash for discussed, and to make recommendations on this basis. The first chapter introduces the relevant theoretical research background, purpose, significance of the subject matter hereof and thesis frame; the second chapter of the margin-related theories are reviewed; the third chapter of the 2015 stock market crash Record collation, and analysis are summarized on this basis, Chapter IV using VAR model and Granger causality test on the margin in the empirical analysis of the role of the stock market crash in 2015; last chapter come to the conclusion and suggestions.The reason of the stock market crash in 2015 is complex. The role of margin trading in the stock market crash is not decisive, but it is still worth considering. The margin trade can suppress the fluctuations of the stock market, which has the two-way trading, plays a role in stabilizing the price. But in 2015 stock market crash, this positive margin function not only failed to play out, but play the negative function role to increase the market fluctuation. Therefore, this study will help us to understand the role and function of margin trading to the stock market crash in 2015, and seek solutions and programs to improve the system of margin trading, margin trading and further play a positive function, to avoid making the same mistakes and crash tragedy staged another round, it has a certain theoretical and practical significance.