Wu Guoping: A Shares Quietly Enter The New Normal Of Stereoscopic Trading.

In February 9, 2015, the Shanghai 50ETF officially traded, and the game entered a new era. If this bull market accelerates the market's perception of leveraged transactions, the introduction of options will mean that the A share market will enter a new normal of stereoscopic trading and a new era of prosperity.

First, we should solve the goal of starting the capital market option trading from the perspective of top-level design, that is, we must enhance the proportion of direct financing market, and let the market play a leading role in the allocation of resources. And the important precondition of this policy goal needs to let the participants to re understand and configure China's capital market, and to make active trading while improving efficiency. It also changes the awkward position of A shares "heavy financing and light investment", and is more likely to change the market ecosystem that has been "short bear long".

So what is the charisma of options products that can have such a far-reaching and significant impact on A shares? I believe that investors with certain market experience are easy to associate with the same warrants with two-way transactions and T+0 characteristics. But in fact, options and warrants are completely different. This is because from the perspective of supply, there are very limited varieties of warrants traded in the market. Only a small number of listed companies and brokerages become lucky ones, so to a large extent, they are very keen on turbulent market enthusiasm, capital speculation and manipulation. In contrast, Shanghai 50ETF, as a standard contract, has unlimited supply in theory, and its maneuverability, liquidity and volatility are all more moderate and reasonable. Moreover, the option product has both leverage and short selling function, so its price discovery function and risk management function are very prominent, which is very important for attracting long-term investors to enter the market.

Some investors will be wondering if the option product is allowed to be short, will the A share fall if it is launched? Some investors will also wonder if the funds will be fry after the option product can be T+0. Actually, in my view, these views are all in the traditional A share trend investment thinking. The change of option products to the A share market has not only enriched the market ecosystem, but also promoted the market environment to become more mature. To put it plainly, Option products In itself, it will not change the direction of the operation of the A share itself. It will change more about investment philosophy, strategy and structure. It can also be simply interpreted as "the trend is unchanged, but the volatility has changed". The "temper" of the market will become more unpredictable. In the black swan's rumor attacks, the short-term irrational fluctuations will be very intense. Of course, once the rumors are broken, the recovery of market sentiment will become quite fierce. From this perspective, although regulators have set up barriers for investors to participate in options business, investors' professional ability and Trading strategy The requirements have been increased by more than one magnitude, and more opportunities may depend on the strength of institutions.

So this is the Shanghai certification. ETF options What is the impact of the launch of the product on the underlying stocks themselves? In the short term, the trading strategy of the agencies in the allocation target will indeed increase the allocation of the underlying stocks, and has gained the corresponding market influence, but this will not change the trend of the market itself. Only the blue chips, such as the bleak transaction of ECG, will undergo profound changes, so there will be more opportunities for fluctuations. This is the first point. The second point is that the logic of market linkage will change. In the past, we always understood the flow of capital simply by industry rotation, and the emergence of Shanghai 50ETF will reshape the pricing path of underlying stocks. That is to say, the rotation of the underlying stocks, especially the Shanghai 50ETF stock market, will overtake the industry itself. As for the promotion of the performance of the brokerage sector, in the long run, it is undoubtedly a positive, which investors should pay attention to.

All in all, the launch of Shanghai 50ETF will open up the new normal of stereoscopic trading in the A share market, bringing more different investment ideas, funds and opportunities. What is needed is the further improvement of the professional ability of investors. Now the coming of this moment will bring new atmosphere to the future of our gambling. Now it is only the beginning, only the index option products, and slowly wait for our stock options to gradually enter our field of vision. It is certain that the market will only become more exciting in the future. From this perspective, the turbulence at the moment will be foreshadowed and laid the foundation for the future. Finally, I would like to thank Dr. Li Huaxi, my student, for his contribution to the contents of this article.