Research On The Influence Of The Night Trading On Commodity Futures Market

With the process of global economic integration,the global financial market has been booming,and in order to satisfy investor’s demand,the New York Mercantile Exchange and the London Metal Exchange have basically achieved a full-day deal in succession,taking measures to prolong the trading hours of commodities.The Chicago Mercantile Exchange was approved in May 2012 to extend the electronic disk trading hours of crop futures from 17 hours per day to 21 hours per day.After a long period of brewing in April 2013,the Hong Kong exchange launched the "Closing Futures trading period"(i.e.the futures Night Market),the futures market for a long period of 6 hours,to the end of the night 11 o’clock.In order to conform to the trend of the globalization of commodity futures trading,and solve the price diving problem of futures varieties with stronger linkage with international market,Shanghai Futures Exchange launched the Night trading system of gold and silver futures in the July 2013,the same year December,launched the same trading system of nonferrous metals varieties copper,aluminum,zinc,lead futures trading night,in the next two years,Dalian Commodity Exchange and Zhengzhou Commodity Exchange have opened including palm oil,cotton and other agricultural products and more than more than 10 kinds of other futures varieties of the Night Trading.It is expected to reduce the risk of overnight positions of domestic futures investors by extending the transaction time to cover the major trading hours of the international market.As at the end of 2016,the three major futures exchanges in China have reached 28 varieties of the Night Trading,the Shanghai Futures Exchange has achieved a full range of the Night Trading coverage.Before the launch of the Night Trading mechanism,domestic futures trading prices are often affected by the main trading market’s overnight information in Europe and the United States,which caused unexpected losses of many domestic investors.Does the implementation of the Night Trading mechanism significantly improve the activity of our futures market and reduce the risk of price fluctuation? Can we really improve the relationship between China’s current market and the internal and external futures market and improve the pricing efficiency of domestic futures market?Combing the Night Trading in China’s Commodity futures market implementation process,considering the pertinence and data feasibility of the research,select the precious metals,nonferrous metals futures,and rebar futures as the research object,from the market transaction volume,volatility and pricing efficiency,the paper examines the practical significance of the Night Trading mechanism in China’s futures market.The research shows that the mechanism of Night Trading in precious metals and nonferrous metals futures has basically achieved the original intention of policy makers.Significantly improve the market activity while lowering the risk of price’s overnight changes,and further enhance the futures market pricing capacity.However,the Night Trading in the rebar futures trading market has shown the "acclimatized" symptom,the market risk and pricing capacity has not produced the expected effect.Finally,combining the conclusion of the research,we propose some policy suggestions.