Margin trading refers to the business that securities companies lend money to customers to buy securities or issue securities for customers to sell securities. Securities transactions arising from margin trading are called margin trading. Margin trading can be divided into two types: margin trading and margin trading. Customers borrowing funds from securities companies to buy securities are called margin financing and securities lending, and customers borrowing securities from securities companies to sell securities are called margin financing and securities lending.
2. Investment business refers to the investment of trust funds in securities market products or rights and interests.
An investment bank is a financial institution. According to Investment Bank Online, the businesses of international investment banks include: corporate financing, mergers and acquisitions, financial consulting and other businesses. Investment banks are the main financial intermediaries in the capital market. In China, investment banking business mainly includes: securities underwriting, securities trading, mergers and acquisitions, fund management, project financing, venture capital, credit asset securitization, etc.
The fundamental difference is that one is creditor's rights and the other is equity.
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Risks of margin financing and securities lending business
1. Margin trading can help the underlying securities rise and fall. The securities market has the characteristics of going up more, buying less, falling more and selling less, which is what we often say. Margin trading is introduced into credit trading, and investors can operate through margin trading to help the underlying securities rise and fall.
2. The introduction of margin financing and securities lending business makes securities trading easier to be manipulated. Margin trading produces leverage effect by introducing credit transactions, which makes it easier for speculative funds to manipulate the market, easily causing huge fluctuations in the market and damaging the interests of investors.
3. Margin trading may pose a threat to the stability of financial system. Margin trading is a kind of credit transaction, and the implementation of margin system has intensified the turmoil in the securities market.
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