Customers financing securities companies to buy securities are called "short selling"; < Do More Stocks > Securities borrowing is to sell securities, and then return them with securities, and securities companies lend securities to customers for sale.
Customers return the same kind and quantity of securities at maturity and pay interest. Customers selling securities from securities companies are called "short selling". Short-selling stocks > Margin trading can be used as a sharp weapon to short the stock market. After the launch, it will be more difficult to operate, and it will be better to operate carefully. Benefits of margin trading
1, play the role of price stabilizer.
Under the perfect market system, the credit trading system can play the role of price stabilizer, that is, when excessive speculation or speculation in the market leads to certain
When the stock price soars, investors can sell the stock through short selling, thus prompting the stock price to fall;
On the other hand, when the value of a stock is undervalued, investors can buy the stock through financing, thus pushing the stock price up.
2. Effectively relieve the pressure of market funds.
For the financing channels of securities companies, there can be many ways, such as funds, so the liberalization of financing and the entry of bank funds into the market will be divided into two steps
. In the downturn of the stock market, it can not only solve the urgent need for institutions that need capital adjustment,
It will also bring quite good investment income.
3. Stimulate the A-share market to be active.
Margin trading is conducive to active market transactions, and the amplification effect of existing funds in the market is also a way to stimulate the active A-share market.
Wu Chunlong and Chen Xiangsheng, analysts of CITIC Jiantou Securities, believe that the margin trading business is conducive to increasing the liquidity of the stock market.
4. Improve the living environment of securities companies.
Margin trading can not only bring a lot of commission income and spread income to brokers,
It can also generate many opportunities for product innovation, which makes it possible for self-operated businesses to reduce costs and hedge.
5, the basis of multi-level securities market
Margin trading system is the foundation of modern multi-level securities market, and it is also a supporting policy to solve the structural imbalance between supply and demand that will inevitably occur after the old and new separatist regimes.
Margin trading, short-selling mechanism and stock index futures are linked together, which will greatly enlarge the scale of funds and market risk at the same time.
Effect. Under the imperfect market system, credit transaction will not only play the role of price stabilizer, but will further aggravate market volatility.
The risk is manifested in two aspects. First, the overdraft ratio is too large, and once the stock price falls, its losses will double; Second, when the market index bears the market,
Credit transactions help to fall. negative impact
First of all, margin financing and securities lending may contribute to ups and downs and increase market volatility.
Second, it may increase the systemic risk of the financial system.
First of all, the introduction of margin financing and securities lending will greatly improve the activity of trading, thus bringing more brokerage business income to securities companies. According to international experience, margin financing and securities lending can generally bring 30%-40% income growth to the brokerage business of securities companies.
Control credit limit through margin financing and securities lending
Drawing on the experience of Taiwan Province Province in managing the overall credit line of the market, we can consider setting these two ratios at 60% and 30% respectively in China at this stage. When the margin ratio is less than 60% due to the decline in securities prices, securities finance companies will stop financing securities companies. When the margin ratio is lower than 30%, the securities finance company will notify the securities company to pay the margin, otherwise the mortgage securities will be forcibly sold. The margin of a securities company can be cash or qualified securities. When securities are used as margin, two other indicators should be set: first, the cash ratio, that is, the margin of securities firms cannot be all securities, but must contain a certain proportion of cash. The cash ratio can be set at 20%; Second, the discount rate of secured securities, that is, the securities used as margin can not be calculated according to their market value, but a certain discount rate should be deducted to reduce the credit risk caused by excessive fluctuations in securities prices. The discount rate of guaranteed securities is related to the type of securities. The discount rate of national debt can be calculated as 10%, and the discount rate of listed stocks can be calculated as 30%.
The margin ratio of margin financing and securities lending also includes the minimum initial margin ratio and regular maintenance rate, which can be set at 70% and 30% respectively. Its meaning is consistent with the minimum initial ratio of margin financing and securities lending and the conventional ratio.
Margin ratio = margin/(number of securities purchased by financing * purchase price) * 100%
Margin ratio = margin/(number of securities sold by margin * selling price) * 100%
At this stage, it is stipulated that the above two proportions shall not be less than 50%.
(2) The credit line management of securities institutions includes the management of securities finance companies and the management of securities companies. Drawing on the experience of Taiwan Province Province, the credit line management of securities finance companies can be realized through the management of net capital ratio: first, the minimum capital adequacy ratio of securities finance companies is 8%; Second, it is stipulated that the financing of securities finance companies from banks shall not exceed 6 times of their net capital; Third, the financing amount of a securities finance company to any securities company cannot exceed 15% of its net value.
The management of securities companies can also be implemented through the proportion management of net capital: First, Taiwan Province Province sets the maximum ratio of the total amount of securities companies' margin financing and securities lending to investors to its net capital at 250%. Considering that the capital ratio of China's securities companies is far less than that of Taiwan Province Province, we can consider setting this ratio as 200%. Second, the amount of margin financing and securities lending for a single securities of each securities company shall not exceed 10% and 5% of its net capital respectively.
(3) Individual stock credit line management The purpose of individual stock credit line management is to prevent excessive risk increase in stock margin financing and securities lending. It can be stipulated that when the amount of margin financing and securities lending of a stock reaches 25% of the circulating share capital of a listed company, the exchange will stop margin financing and securities lending, and resume trading when the ratio falls below 18%; When the amount of securities lending has exceeded the financing amount, the securities lending transaction should also be stopped until the balance is restored.
In addition, securities depository is also the key link of margin financing and securities lending, and the depository system in the United States is the most perfect. Therefore, when designing the collateral depository mechanism in China's margin financing and securities lending system, more reference should be made to the operating mechanism of the United States.