What Is a Transaction Deposit?

Transaction Margin A self-prepared amount that investors need to pay when buying securities in the securities market. If the member or customer has been occupied in their special settlement account, the central reserve grain auction transaction to ensure the performance of their position contract also needs to pay the corresponding security deposit, which is generally 5 yuan, and the transaction security deposit is paid to the transaction center.

An important feature of the futures market is the margin trading system, whose main purpose is to reduce the risk of default. Maintain transaction credit to ensure the normal operation of the futures market, if only from this perspective. Then the safest insurance method is to set a 100% margin. In this way, futures investors will have no chance of default, but it also eliminates the leverage function of the futures market. Therefore, the level of margin will have an important impact on controlling transaction risks and market liquidity. How to scientifically and accurately determine the collection amount of China's futures market trading margin has always been a concern of all parties in the futures market ^[1]

Two principles should be adhered to when determining the margin level or quantity limit of the margin: First, the level of the margin can resist the risk of price fluctuations in a day, that is, the margin level is not less than the maximum fluctuation of the price in a day. Second, the margin level can withstand the risk of closing the daily limit for two consecutive days after opening a position. There are two specific methods for determining the futures market margin: (1) It is determined according to the value of the futures contract. Usually a certain percentage of the contract value. This method is widely used in China's futures market. (2) Determined by the amount of price changes. Mainly based on the amount of futures contract price changes to determine the value of margin. This method is adopted by foreign exchanges. However, no matter what method is used to determine the margin level, it involves the choice of the method of setting the trading margin.

In the early days, the theory of price volatility was normally used in the futures market to determine the trading margin, and then new margin determination methods such as the Extreme Value Theory (EVT) combination theory gradually appeared. However, even in developed foreign futures markets, futures exchanges are very cautious when using the latter two theories to determine margins, and they are more designed from the perspective of risk control, so the more conservative price volatility is the theory of normal distribution Become the primary prerequisite for futures exchanges to determine the level of trading margin ^[2]

Margin collection value is only the margin collection reference value calculated according to the VaR model. At this reference value, other factors related to the determination of the margin need to be considered. Deviations from historical volatility and implied volatility; level of net holdings; ratio of net holdings value to underlying market value; ratio of futures transaction amount to total underlying market value; ratio of net holdings to trading volume; continuity of changes, etc. A series of factors influence the benchmark value to make upward or downward changes, making it more accurately compensate for the risk of price fluctuations.

Because each exchange will set different trading margin collection standards according to the different number of positions held by a futures contract and the different stages of listing operations, especially when the transaction enters within one month before the last trading day, the price changes will become more complicated, There are also many factors affecting the price trend, so the integrity and systemicity of futures prices are affected, making the empirical analysis much more difficult. Therefore, how much the margin level should be in order to effectively prevent market risks cannot be answered simply by studying the changes in futures market prices.

As the most basic and core part of the risk management system, the margin system of the domestic futures market should continue to improve. Margin levels should be determined based on market risk measurements. It has both security and market competitiveness. This is an inevitable requirement for the development of the domestic futures market, and it is also a requirement to respond to competition from the international futures market ^[3] .