The function of stock index futures fuse system is mainly manifested in the following aspects:
1. It provides an early warning function for the trading risks in the stock index futures market, effectively preventing 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 It is conducive to eliminating the liquidity decline caused by outdated prices in the futures market.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 normal display of the market will be delayed due to the obstruction of a large number of buying (or selling), resulting in outdated prices. At this time, the price people see is actually the last moment price, at which the transaction 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 The fuse cycle is 10 minute, which can eliminate the instruction blocking phenomenon of the trading system, eliminate outdated prices and ensure smooth trading.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. 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, so as to reduce the losses caused by the stock market crash, but this did not play its due role. The accumulated market risks are as rampant as water that breaks its banks. After the market opened, Hong Kong's Hang Seng Index fell 33%. Most of the members were unable to perform their duties because of the breach of the deposit, and the exchange almost went bankrupt.
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.
The "aftermath" after the earthquake in Japan quickly spread to the futures market. Trading in Japanese rubber futures even stopped for a time because several recent contracts plunged after opening and hit the daily limit. [5]
Tokyo Industrial Products Exchange announced yesterday morning that due to the interference of earthquake factors, the exchange decided to start the fuse mechanism in rubber trading, stipulating that the price change of rubber varieties should not exceed 30 yen compared with the settlement price of the previous trading day. Yesterday afternoon, Tokyo Industrial Products Exchange announced once again to expand the price limit of rubber futures trading. As of yesterday, the main contract of Japanese rubber futures plunged 58.4 yen to 343 yen.
Ren Wei, an analyst at Bohai Futures, said that the earthquake caused serious losses to Toyota, Honda and Nissan because many Japanese automakers were located on the east coast of Japan. No matter from Japan and the global economy, or from the downstream demand of rubber, the earthquake in Japan has a negative impact on the trend of rubber. Although the real impact of the earthquake on Japan's economy and natural rubber demand is still difficult to determine, psychological factors are enough to guide speculative funds to short rubber.