The Research On The Impact Of Magin Trading On The Volatility Of A-share Main Board Market In China

On March 31,2010,margin trading system was officially implemented in China,which means the opening of short selling channel in China,expanding the product selection space for investors and the market,and avoiding risks at the same time.The main board market plays an important role in China’s stocks market,the number of underlying stocks that can be traded on the main board market is quite large.Therefore,this paper studies the impact of margin trading on the stock price fluctuation of China’s A-share main board market,it is practical significance for exploring the operating mechanism of margin trading and improving China’s stocks market.This paper makes an empirical analysis of the role of margin trading in price fluctuation,determines the impact,and then puts forward suggestions to improve the stocks market.Firstly,it sorts out the domestic and foreign research literatures related to this paper,briefly summarizes the relevant knowledge of margin trading,expounds the related theories,and describes the panel data model applied in this paper,which lays the foundation for the empirical analysis.Secondly,combing the scale change of China’s main board market in the past ten years,analyze the current situation of China’s margin trading.the improved BB turning method is used to divide the stock market into five markets: slow bull market,slow bear market,mad bull market,mad bear market and horizontal market.Thirdly,discuss the effect of margin trading on the volatility mechanism,according to the implementation of margin trading and different market conditions before and after the establishment of panel data model to carry out empirical research on the impact of volatility.The results show that the implementation of margin trading can effectively restrain the volatility of stock price.Except the mad bear market,the implementation of margin trading can effectively restrain the volatility of stock price.Finally,the comparative analysis of empirical results,combined with the development status of margin trading,propose corresponding suggestions for promoting the healthy development of the stock market.