The Impact Of Shanghai 50 ETF Options On The Shanghai Stock Market

The launch of the SSE 50 ETF option has opened the option era of China's capital market.As the country's first option product,what impact does the introduction of SSE 50 ETF Options have on the stock market? Whether this influence is positive or negative? What options should be introduced in the future? How to improve the financial derivatives market by more derivative products positively? These are the focus of investors and regulators.The impact of options on the stock market is manifold.The research directions of this paper are the impact of the launch of the Shanghai 50 ETF option on the liquidity and volatility of the Shanghai stock market.This article first summarizes the relevant research results at home and abroad,combing the development status of index options and the influencing mechanism,and then expounding the reasons and ways of positive and negative impact of options on the liquidity and volatility of stock market from the theoretical perspective.The study verified the effects of liquidity and volatility,respectively.The empirical study of liquidity is obtained through the use of the double difference model.The introduction of the Shanghai 50 ETF option has a significant impact on the liquidity of the Shanghai stock market both in the short and long term,and this direction of influence is positive,that is,it can improve the liquidity of the stock market..The empirical study of volatility is achieved through GARCH and TGARCH models.The results of the study show that the volatility of the spot market is increasing in the short term,and this effect is asymmetric.It is believed that bad news generates more volatility to the market than good news.However,in the long run,the launch of the Shanghai 50 ETF option has no significant effect on the liquidity of the Shanghai stock market.Finally,the future of this paper is discussed.It is hoped that the development of China's derivatives market in the future can strengthen supervision,appropriately develop more index option contracts,continue to disseminate options knowledge to investors,and make great efforts to promote the role of derivatives in the market for investors as well as relax the trading restrictions gradually.