Is The Buying Strategy Effective When Stock Market Price Reaches The Limit Of Rise And Stop

The price limit system is an important price control system in the securities market,which has a very important impact on the overall transaction of the market.The discussion of its impact in academic discussions mainly focuses on its ability to prevent extreme fluctuations in the market,at the same time,it also causes Spillovers of some trading fluctuations and delayed effects of price discovery.Through the observation of these effects,some traders have long believed that there will be a continuous upward trend after the stock price limit.In the history of A-share market,there emerged a large number of " Speculation Daredevils".As a long-term popular investment strategy in the stock market,"Fight the board" has been highly sought after.However,is this investment strategy an effective investment? From the experience observation and the existing literature,it seems that there are significant abnormal returns in the short term after the price limit.If we consider the constraints in the actual operation,will the " Fight the board " strategy still be effective?In order to test the above two problems,this paper mainly uses the combination of theory and empirical research.Firstly,it studies and summarizes the literature review related to the research direction.Then,it combines the previous literature review results and theories to analyze the relevant theories about the "Fight the board" behavior and the "Fight the board" effect in reality,speculates the possible situation and makes research hypothesis.According to the analysis of the actual situation,it uses the event study method to test whether there are significant abnormal returns in the following five consecutive days by three events: the closing of the day with price fluctuation,the rising of the day in the market and the meeting of the day's maximum price without closing.Then,under the control of the factors affecting the abnormal returns of the "Fight the board" strategy,the paper further discusses the effectiveness of the operation of the two kinds of realistic "Fight the board" events,thus scientifically demonstrate the purpose of the entire event.Based on the realistic constraints,this paper studies and discusses the effectiveness of the "Fight the board" strategy.The main innovation of this paper lies in the novelty of topic selection angle,research direction and research significance,which has both theoretical and practical significance.After the progressive theoretical analysis and empirical test,the author finds that there are no significant excess returns and some significant negative abnormal returns in the actual operation of the "strike" behavior.Investors with this strategy are likely to face huge losses in real life.Therefore,the so-called "Fight the board" strategy only looks good,but in fact it is a beautiful trap for investors.However,many investors in the market,especially individual investors,tend to flourish,which means that the price limit system actually damages the interests of investors.Therefore,at the end of this paper,the author puts forward some suggestions to the individual investors,the price limit system and the government: to investors,we should do what we can,not fall into the trap of "Fight the board",increase the understanding of market risk and profit in investment and financial management,make a reasonable evaluation of self-investment behavior and risk tolerance,improve self-investment and rational investment for the rise of our country;The suggestion of the stop-and-fall system mainly refers to the system of Korea and Japan,and formulates appropriate limit of rise and fall for different closing prices,gives reasonable interval of market price returning to equilibrium position,and reduces speculative behavior,at the same time sets up appropriate increase and decrease value for different indicators;for the government's suggestion to increase the rule system of protecting individual investors,establishes and perfects scientific supervision system and risk control.and then the governments should enhance the effectiveness of the market,build a more mature and stable market investment environment for our country.