The fuse mechanism is a market protection mechanism, that is, in the process of securities trading, when the price fluctuation reaches a certain limited target, the trading will be suspended for a period of time, similar to the fuse blowing in power equipment, so it is called the fuse mechanism. Take the US Standard & Poor's 500 as an example. When the index drops by 7%, the trading will be suspended for 15 minutes, and when the index drops by 13%, the trading will be suspended again for 15 minutes. When the index falls by 20%, the NYSE will stop trading on the same day.
Why should China implement the fuse mechanism?
In fact, China's futures market tested the fuse mechanism in the simulated trading stage before the launch of the Shanghai and Shenzhen 300 futures, but the stock index did not trigger the fuse before the market opened, and there was a limit on the rise and fall, so the stock index futures were not launched when they were listed. However, people are not as good as heaven. Thousands of stocks that have never appeared before have appeared frequently this year, and even stock index futures have seen continuous daily limit. At this point, the introduction of fuse mechanism can be said to be imminent. On August 24th, American stock index futures melted. As a result, among the voices of many investors, the CSRC announced on September 6 that it would study, formulate and implement the index fuse mechanism and issue a draft for comments.
Socialism with Chinese characteristics integration mechanism
The fuse system is implemented abroad because there is no price limit system, but in China, the exponential fuse mechanism is still introduced under the limit of 10% price limit, which is very distinctive.
When the Shanghai and Shenzhen 300 Index reaches a certain threshold in one day, all stock-related varieties listed on the Shanghai and Shenzhen Stock Exchanges, such as stocks, convertible bonds, separable bonds and stock options, will be suspended, and all stock index futures contracts of CICC will be suspended. After the suspension, the trading will be resumed or suspended directly as appropriate.
The specific rules are as follows: when the Shanghai and Shenzhen 300 Index rises or falls by 5%, the trading will be suspended for 15 minutes, and the 5% fuse threshold will be triggered after 14.45, and the 7% fuse threshold will be triggered at any time throughout the day, and the trading will be suspended until the close. Both ups and downs are blown, and each file is only blown once a day at most. 15:00, if the transaction is not resumed after the fuse, the closing price of the relevant securities shall be the weighted average price of all transactions (including the last transaction) one minute before the last transaction of the securities on that day.
Arrangements for special time periods: First, the call auction stage does not fuse; If the index triggers the threshold of 5% at call auction, the fuse will start at 9:30, and the fuse duration is 15 minutes; The threshold of 7% was triggered, and the fuse started at 9:30, and the transaction was suspended until the market closed. Second, the fuse duration in the morning was insufficient, and it continued to fuse in the afternoon. Third, the delivery date of stock index futures (the third Friday of each month) is only blown in the morning and trading resumes in the afternoon, regardless of the suspension caused by 5% or 7%. There will always be one day every month.
Here are a few chestnuts to explain the situation in detail, all assuming that there was a fuse system at that time.
5% increase fuse: 20 15 On August 27th, the Shanghai and Shenzhen 300 Index rose by 5% to 14: 4 1. If a fuse system appears at this time, the transaction shall be suspended until 14: 56.
The 7% increase was blown: on July 9, 20 15, the A-share Jedi counterattacked, and the Shanghai and Shenzhen 300 Index rose by 7% at 14: 00. If there is a fuse system, the transaction will end on the same day and there will be no slight decline afterwards, but it doesn't matter.
Blowout with a 5% decline: This is the latest opportunity to trigger a blowout. 1On October 27th, the Shanghai and Shenzhen 300 Index fell 5% to 14: 43. According to the rules, it takes 15 minutes to blow it out, and give everyone a cigarette to cool down.
The decline of 7% was blown away: it is not uncommon for the index to fall by more than 7% this year, but in call auction, the index fell by 7% only once, that is, on July 8. So this article is also controversial. Take July 8 as an example. On that day, call auction's decline reached 7%, which could trigger a fuse. After the fuse is triggered, it will not be traded all day. If this extreme situation occurs, the financing disk cannot be closed, which leads to the lever being stepped on the next day, which leads to another sharp low opening fuse. Of course, the main reason for this extreme situation is the abuse of leverage, which is unlikely to happen again now.
Do not fuse when the decline reaches 5%: this article belongs to the special case mentioned above: stock index futures only fuse in the morning and do not fuse in the afternoon on the delivery date. June 19 is the delivery date of stock index futures. On this day, the decrease of 14: 4 1 reached 5%, but it was not blown because it was the delivery date.
What is the impact on A shares?
The fuse mechanism and price limit can be described as double insurance for A shares. The most direct impact is to narrow the intraday fluctuation range of the stock market and make investors more rational when trading irrationally in the market. For example, when diving in the market, it helps to prevent the collective limit caused by panic. From the political point of view, it can be seen as the response of the regulatory authorities to the voice of the people and the benign interaction between the CSRC and investors. In the long run, it may also be paving the way for opening the limit of ups and downs in the future. The only drawback may be that the price rises and falls by 7%, and no trading is carried out all day. Once the extreme situation of July 8 occurs again, it may have adverse effects.