"Fusing Mechanism" Will Bring Many Changes To The Market.

The A share fusing mechanism will have a positive impact on the market.

However, for the irrational market, although there is the existence of fusing mechanism, it will only provide a "cooling off period" for the market, but does not fundamentally change the market trend.

As a result, if the market pressure is too heavy, the fusing mechanism has played a role in delaying the decline or postponing the centralized capital sell-off, and has not completely released the strong downward kinetic energy of the market.

In this regard, if the market does not improve the risk hedging function of ordinary investors, the risk of shareholding of ordinary investors still exists.

Review 2015, the reform gradually moves towards the depth, the demand of the market to the standard policy system is more and more urgent.

Looking forward to 2016, the pace of reform will not stop. A series of new policies, such as the fusing mechanism, the latest opening time of stock index futures and the new IPO regulations, will be implemented on the first day of the new year.

At the beginning of the year, it was time for the listed companies to publish their performance reports.

From the overall situation of the textile and apparel listed companies in 2015, we can say that the fundamentals are good.

Of course, there are differences between them. Some enterprises have gained some gains, but there are also many anxious people.

Recently, a new term, "fusing mechanism", has given the listed companies a heart to heart.

In December 4, 2015, the Shanghai Stock Exchange, Shenzhen Stock Exchange and CICC officially issued the relevant provisions of the index fusing. The fusing benchmark index was the Shanghai and Shenzhen 300 index, using 5% and 7% two threshold.

It was formally implemented in January 1, 2016.

Circuit Breaker, also known as the automatic stop trading mechanism, refers to the suspended trading measures taken by the exchange to control risks when the volatility of the stock index reaches the prescribed melting point.

Specifically, a contract is being achieved.

Before setting up a fusing price, the contract price can only be traded within this price range for a period of time.

In December 4, 2015, the Shanghai Stock Exchange, Shenzhen Stock Exchange and CICC officially issued the relevant provisions of the index fusing. The fusing benchmark index was the Shanghai and Shenzhen 300 index, using 5% and 7% two threshold.

It was formally implemented in January 1, 2016.

The fusing mechanism mainly provides a "cooling off period" for irrational markets, and will not change the direction of the stock market in essence.

When the market has experienced this "cooling off period", it will return the initiative to the market to meet the needs of market self-regulation.

"Cheng Yi capital, losing funds" is a true portrayal of China's stock market.

However, for this bull market, it may be more appropriate to describe it as "leveraging and losing leverage".

Indeed, over the past year or so, leverage has had a significant impact on the market's leveraging.

Among them, during the period from July 2014 to June 2015, the scale of stock market financing rose sharply from 450 billion to 2 trillion and 270 billion.

At the same time, with the rapid development of on-site financing, the impact of A share on the leveraging of the market is more significant.

During the period from 3 to June this year, it was the key point of the A share market's over-the-counter business, and at the peak of the market, the over-the-counter business was over 2 trillion.

However, for leveraged funds, it has both advantages and disadvantages.

During the period from June 2015 to July, the stock market continued to deduce irrational falls.

The true reflection of helping fall.

At the same time, combined with the vigorous "deleveraging" process, its impact on the market is also quite profound.

It should be noted that in essence, the fusing mechanism mainly provides a "cooling off period" for irrational markets, but it will not change the direction of the stock market in essence.

When the market has experienced this "cooling off period", it will return the initiative to the market to meet the needs of market self-regulation.

Perhaps, after the A share fusing mechanism is launched, it will bring more stability expectations to the market.

At the same time, on the basis of existing price limits, the fusing mechanism is implemented again. In fact, it is a form of "double insurance", which conveys more stability signals to the market.

As the management said, the stock market ups and downs have their own operation rules. Generally, the management does not interfere. But when the stock market fluctuates violently and may cause systemic risk, management will take decisive measures to stabilize the stock market in time.

In accordance with the operation process, from January 1, 2016, China will implement the Chinese version of the fusing mechanism, that is, the A share fusing mode.

At this point, with the formal launch of the A share fusing mechanism, it will profoundly affect the operation of the A share market.

For upcoming

There are many notable characteristics of fusing mechanism.

Specifically, it highlights the highlights of these aspects.

First, when the fuse threshold of 5% is triggered, the market will suspend trading time to 15 minutes.

Second: the same range of fuses can only trigger once, while the late trigger time is triggered by 5% or 7% in any time period of the day.

Third: take the rule of two-way fusion, and will form a "three cities combined fuses, two-way fuse and split fuse" mode.

Fourth, stock index futures trading time is synchronized with A shares.

Fifthly, fuses continued until 15:00, and no bulk trading could be made on that day.

Its six: retain the price limit system and the existing "T 1" trading mechanism.

In view of this, the upcoming A shares fusing mechanism takes into account the operation characteristics of the A share market and can draw lessons from the fusing mode of the mature market abroad.

Perhaps, when the A share fusion mechanism is launched, it will bring more beneficial effects to the market.