Study of Speculative Trading Risks Based on Example of Short Squeezing

DOI

10.2991/978-94-6463-036-7_182How to use a DOI?

Keywords

Financial derivatives; Systemic risk; Prevent; Control

Abstract

Financial derivatives are essential hedging tools in modern financial markets. Since the 1990s, China's over-the-counter derivatives market has developed rapidly, occupying an important position in the world and playing an important role in economic and financial development. However, the open development of the derivatives market also faces risks. From the perspective of international markets, the overuse of poorly managed derivatives markets and overdevelopment that does not match regulatory capacity can generate risks in many ways. The opening of China's derivatives market to foreign financial entities also poses a potential systemic risk, which may threaten national financial security in serious cases and requires high vigilance. General financial products and simple derivatives form complex derivatives by nesting various complex structures with high leverage and betting characteristics, which can pry the financial market or become a tool to manipulate the financial market under special circumstances, thus affecting financial institutions and impacting the financial system. Based on the current situation of the development and regulation of China's derivatives market, the cases of overseas hedging losses and the potential systemic risks that may be increased by financial opening, it is suggested that the planning of the development and opening path of China's derivatives market and the regulatory system can be further improved to prevent and control the accumulation of potential systemic risks.

Copyright

© 2022 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Ning Dong
AU  - Jiaqi Wang
AU  - Yuran Yang
PY  - 2022
DA  - 2022/12/31
TI  - Study of Speculative Trading Risks Based on Example of Short Squeezing
BT  - Proceedings of the 2022 2nd International Conference on Economic Development and Business Culture (ICEDBC 2022)
PB  - Atlantis Press
SP  - 1230
EP  - 1236
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-036-7_182
DO  - 10.2991/978-94-6463-036-7_182
ID  - Dong2022
ER  -