Study of Speculative Trading Risks Based on Example of Short Squeezing

Ning Dong, Jiaqi Wang () and Yuran Yang
Additional contact information
Ning Dong: University of Adelaide, School of Business
Jiaqi Wang: McMaster University, Department of Science
Yuran Yang: Beijing-Dublin International College, Beijing University of Technology

A chapter in Proceedings of the 2022 2nd International Conference on Economic Development and Business Culture (ICEDBC 2022), 2022, pp 1230-1236 from Springer

Abstract: 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.

Keywords: Financial derivatives; Systemic risk; Prevent; Control (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-036-7_182

Ordering information: This item can be ordered from
http://www.springer.com/9789464630367

DOI: 10.2991/978-94-6463-036-7_182

Access Statistics for this chapter

More chapters in Advances in Economics, Business and Management Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().