Analysis Of The Influence Of Margin And Short-selling On The Fluctuation Of Chinese Stock Market

On March 31,2010,after four years of preparation,the pilot project of margin financing was officially launched in China's capital market.Until then,market investors can only buy unilateral buying transactions,and cannot sell short.The market's shortcomings lead to a greater risk of volatility in the stock market.After experiencing five large-scale expansions,the subject of margin financing and securities lending on the capital market in China has increased to a large extent,and the total number has exceeded 950.Although the margin has gained great development and progress,it is still in the exploratory stage,and some problems still need to be discovered and solved.In 2015,China's stock market experienced dramatic fluctuations.First,it rose sharply and ushered in a fierce decline.This reminds us of the volatility of the Chinese stock market from 2006 to 2008.In order to stabilize the market order,the regulatory authorities immediately investigated the situation of off-site capital allocation and introduced a series of policy provisions to limit the margin trading and securities lending transactions.This is considered to be a temporary stabilization of the stock market.However,this storm has not passed this way.Margin trading was pushed up by some domestic experts,scholars and investors,and its role in stabilizing the stock market has been questioned by the public.As for the abnormal fluctuations in China's stock market,what kind of influence is played by the financing and securities lending in the end,and these are issues that people have to discuss and explore.In this paper,first of all,learn from the predecessors' point of view,a large number of looked at the margin of relevant research literature at home and abroad,and has carried on the arrangement and classification,the numerous experts and scholars view seriously analyzed and combed.Then this paper expounds the relevant concepts of margin,this paper introduces the function of the securities lending and borrowing,and lists the development of our country margin and the status quo,and other countries and regions in the world after clearing three development modes.Then,this paper describes the relationship between the two stock disasters and the margin financing,which leads to the following model research and empirical analysis.Finally,some policy suggestions are given based on the empirical results.This paper selected three phases to study,namely,the stock market volatility from May 2014 to June 2015,the stock market stable oscillation period from March 2008 to December 2013,and the stock from February 2006 to February 2008 high foam market stage.Through the establishment of multivariate regression model,this paper introduces some macro variables to analyze and contrast the three time periods respectively,and then joins margin financing and securities variables to explore the impact of margin financing and stock trading on the volatility of the stock market.This paper empirically finds that the period from May 2015 to June 2015 in margin financing and securities lending has indeed played a role in promoting the fluctuation of China's stock market.As China is still in the exploratory stage of the margin trading system,it has not matured,and investors' investment philosophy has not changed,resulting in margin financing and securities lending has not played its role in stabilizing the volatility of the stock market.As a result,the stock market was pushed up in 2015 and accumulated a lot of bubbles,laying the ground for the subsequent stock market crash.Based on the analysis results,this article proposes some policy suggestions for the development of the two financial systems.First,strengthen the formulation and improvement of laws and regulations related to margin trading and securities transactions,and strengthen the supervision and control of the entire market's trading and circulation.Second,orderly increase the scope of the subject of the two bonds,enrich the variety and quantity,and give investors more choices to meet the diversified needs.Third,actively guide the concept of investors,and strengthen the explanation and training of related professional knowledge of margin financing and securities through some convenient ways.Fourth,improve the information disclosure mechanism and strengthen information transparency and disclosure through the improvement of the system.Allow the market to digest information in a timely manner in order to make a correct response.Fifth,strengthen the management of securities firms,do a good job of communication between the market and investors,and assume corresponding responsibilities.