1、
Because when the market fluctuation reaches the melting point of 6%, it is necessary to control the trading risk and win the thinking time and operation time. This is enough for traders to have enough time to arrive at the exchange, so that the computer host can match the transaction under the trading instruction reflecting their willingness to operate, and consider the risk management method after the transaction is resumed. Remember that there will be a transaction of 10 minutes in the fuse point.
2、
In order to effectively prevent the sudden and serious risks, it is necessary to give an early warning of the trading risks in the stock index futures market. This gives traders of stock index futures a warning, such as introducing a 6% fuse point before the market fluctuation reaches 10%, that is, in the subsequent 10 minute trading, the index quotation cannot exceed the fuse point, that is, the index point of stock index futures rises or falls by 6%.
At this time, let them all realize what kind of state the next transaction will be, and take corresponding preventive measures, so that the transaction risk will not happen suddenly without warning. Including futures, stock index futures traders, agent members, settlement members and exchanges have strong reminders.
3、
It provides an institutional guarantee for gradually resolving transaction risks. The introduction of fuse mechanism in stock index futures trading can gradually resolve trading risks in stages, rather than being caught off guard in one step. A typical example is that after the worldwide stock market crash, the Hong Kong Futures Exchange announced that it would stop trading for four days on1October 20th 1987 and 10 to reduce the losses caused by the stock market crash. After the market opened, the Hang Seng Index in Hong Kong fell by 33%, with frequent defaults. Most of the members were unable to perform their duties because of the breach of the deposit, and the exchange almost went bankrupt.
When the market with abnormal fluctuation and no fuse mechanism appears on the rampage, it usually takes several months or even a year to complete the fluctuation in an instant, and the account with one or even several times the trading margin will be quickly penetrated, which will make traders in the wrong direction unprepared, increase the difficulty of settlement and bring countless disputes. In this case, the method of closing the market is not feasible.
4、
It is conducive to eliminating the decline in liquidity caused by outdated prices in the futures market. 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. In the unilateral market with abnormal fluctuation of stock index futures, outdated prices will be produced, and the normal display of the market will be delayed due to the obstruction of a large number of buying (or selling). At this time, the price people see is actually the price at the last moment, and trading at this price must not be closed.