The fuse mechanism is very effective for the risk control of stock index futures and even the whole futures market. In fact, since 1988 introduced the fuse mechanism into the American stock market, 18 has not experienced a stock market crash and played an important role.

The function of stock index futures fuse system is mainly manifested in the following aspects:

It provides an early warning function for the trading risks in the stock index futures market, effectively preventing the sudden and serious risks. Judging from the design of the fuse mechanism of stock index futures in China, before the market fluctuation reaches the limit of 10%, 6% fuse point is introduced, that is, the index point of stock index futures rises and falls by 6%.

That is to say, in the subsequent 10 minute trading, the index quotation cannot exceed the fuse point, which is not only a warning to stock index futures traders, but also a warning to risk management at all levels of futures trading. At this time, a strong reminder is given to the traders, agent members, settlement members and transactions of futures stock index futures.

Let them know what the next transaction will be like and take corresponding preventive measures, so that the transaction risk will not happen suddenly without warning.

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There are generally two forms of fuse mechanism adopted in foreign exchanges, namely, "melting off" and "melting non-stop"; The former means that when the price touches the fuse point, the transaction will be suspended for a period of time, and the latter means that after the price touches the fuse point, the transaction declaration will continue to match the transaction within the fuse price range for a period of time. The fuse mechanism of "fuse and break" is widely used in the world.

China's stock index futures will soon introduce a fuse system, which is based on the 10% price limit of individual stocks in the stock spot market, in order to curb irrational excessive fluctuations in the stock index futures market.

According to the design, when the daily fluctuation range of stock index futures reaches 6%, it is the first melting point of Shanghai and Shenzhen 300 index futures trading, and it will "continuously fuse" within this range. When the "melting point" is reached, 10 minutes can still be traded, but the index quotation cannot exceed 6%. After 10 minutes, the fluctuation range is enlarged to 10%, corresponding to the daily limit of individual stocks in the spot market 10%.

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