First, investors must have sufficient funds in advance when engaging in ordinary securities trading and buying securities; You must have enough securities when you sell them. However, engaging in margin trading is different. When investors predict that the price of securities will rise and do not have enough funds at hand, they can borrow funds from securities companies to buy securities. When it is predicted that the price of securities will fall and there is no securities on hand, you can borrow securities from securities companies to sell them.

Second, when investors engage in ordinary securities trading, they only have a relationship with securities companies and do not need to provide guarantees to securities companies; When engaging in margin trading, there is not only the relationship of entrusted buying and selling, but also the relationship of borrowing and lending funds or securities. Therefore, it is necessary to pay a certain percentage of deposit to the securities company in the form of cash or securities in advance, and deliver the securities purchased by financing and the funds obtained from margin financing and securities lending to the securities company as collateral.

Third, when investors engage in ordinary securities trading, the risks are entirely borne by themselves, and they can buy and sell all the securities listed and traded on the stock exchange; When engaging in margin trading, if the funds or securities cannot be repaid in full and on time, it will also bring risks to the securities company, so investors can only buy and sell securities within the scope agreed with the securities company.

For the function of margin trading, the market generally believes that it has four basic functions: First, the price discovery function. The existence of margin financing and securities lending mechanism can integrate more information into the price of securities and make it more fully reflect the intrinsic value of securities. The second is the function of market stability. A complete margin trading is generally completed through two transactions in opposite directions, that is, investors who buy securities by financing must repay the funds borrowed from securities companies by selling the securities they buy; Investors who sell securities through short selling must repay securities borrowed from securities companies by buying securities sold by securities companies. Therefore, the margin financing and securities lending mechanism has a certain function of slowing down the fluctuation of securities prices, which is helpful to the formation of the internal price stability mechanism in the market. The third is the liquidity enhancement function. Margin trading can enlarge the supply and demand of securities to a certain extent, increase the market trading volume, thus activating securities trading and enhancing the liquidity of the securities market. The fourth is the risk management function. Margin trading can not only provide investors with new trading tools, but also help to change the "one-sided" situation of the securities market and facilitate investors to avoid market risks.

As far as the whole market is concerned, margin financing and securities lending can enlarge the supply and demand of securities in the market and activate market transactions. However, if the securities bought by margin trading and sold by margin trading (i.e. the underlying securities) are in small circulation and the market management is improper, it will easily produce negative effects such as excessive speculation.

Most markets believe that the introduction of margin financing and securities lending should precede stock index futures. In mid-2006, China Securities Regulatory Commission issued "Measures for the Administration of Securities Companies' Margin Trading Pilot" and "Guidelines for Internal Control of Securities Companies' Margin Trading Pilot", which officially started the margin trading pilot of securities companies. However, so far, only the sound of stairs has been heard, and no one has come down. The rumored pilot broker has been slow to show up.