What do you mean by fuse? What do you mean by fuse?

Fuse refers to the mechanism of setting a fuse price for the contract before the contract reaches the limit of price increase and decrease, so that the contract trading quotation can only be traded within this price range for a period of time.

The purpose of the fuse mechanism is to let investors have a cooling-off period when the price fluctuates violently, to restrain the irrational excessive fluctuation of the market, and to facilitate the exchange to take certain measures to control market risks during the fuse period. Shanghai and Shenzhen 300 index futures are the only financial products in China that adopt fuse mechanism.

Some mature international financial markets, such as new york Stock Exchange and Chicago Mercantile Exchange, have adopted the fuse mechanism. The functions of the extended data fuse system of stock index futures are mainly shown in the following aspects: 1, which provides an early warning function for trading risks in stock index futures market and effectively prevents the sudden and serious risks.

According to the design of the fuse mechanism of China's stock index futures, 6% fuse point is introduced before the market fluctuation reaches the limit of 10%, that is, the index point of stock index futures rises and falls by 6%, that is, in the subsequent 10 minute trading, the index quotation cannot exceed the fuse point, which not only warns the traders of stock index futures, but also warns the risk management at all levels of futures trading. At this time, there is a strong reminder to traders, agent members, settlement members and exchanges of futures stock index futures, so that they all realize what the future transaction will be like and take corresponding preventive measures, so that trading risks will not suddenly occur without any warning.

2. Win thinking time and operation time for controlling trading risks. When the market fluctuation reaches 6% of the fuse point, there will be a trading time of 10 minute in the fuse point, which is enough for traders to have enough time to consider the risk management method after the transaction is resumed, and the exchange will allow the computer host to match the transaction under the trading instructions that reflect their own willingness to operate.

3. It is conducive to eliminating the liquidity decline caused by outdated prices in the futures market. In the unilateral market with abnormal fluctuation of stock index futures, the obstruction of buying (or selling) in large quantities will delay the normal display of the market and lead to outdated prices. At this time, the price people see is actually the price at the last moment, and trading at this price must not be closed.

A large number of non-trading orders continue to enter the trading system, which will cause more serious transaction congestion and make the data display more backward. The fuse cycle is 10 minute, which can eliminate the instruction blocking phenomenon of the trading system, eliminate outdated prices and ensure smooth trading.

4. It provides institutional guarantee for gradually resolving transaction risks. When the extreme market with abnormal fluctuation appears, the market without fuse mechanism will go on the rampage. Usually, it takes months or even a year to complete the fluctuation in an instant, which will make traders in the wrong direction unable to reach their fingertips, and accounts with one or even several times the trading margin will be quickly penetrated, which will increase the difficulty of settlement and bring countless disputes.

In this case, the method of closing the market is not feasible. In this way, when the fuse mechanism is introduced into stock index futures trading, the trading risk can be gradually resolved in stages, without being caught off guard in one step.