Margin trading refers to the behavior that investors provide collateral to securities companies qualified for margin trading, borrow funds to buy securities or borrow securities and sell them.

Among them, financing is the behavior of investors borrowing money to buy securities. Investors are optimistic about the price trend of the underlying securities and choose to increase leverage to expand income; Securities lending is the behavior that investors borrow securities and sell them. Investors expect the price of the underlying securities to fall and profit from it through the act of "selling securities by short selling".

Margin trading is a leverage tool. Investors expect the price of the underlying securities to rise (or fall), and borrow funds (or securities) to expand leverage, thus obtaining investment benefit opportunities that did not exist originally.

For example, investors hold cash of 6.5438+0 million yuan, and the unit price of stock A is 654.38+000 yuan. Without leverage, investors can buy and hold 6,543.8+0,000 shares of stock A. When stock A rises to 654.38+0.50 yuan, investors will earn 500,000 yuan.

After the margin financing and securities lending were leveraged, investors borrowed 6,543,800 yuan to buy and hold a total of 20,000 shares of A, with a total amount of 2 million yuan. When stock A rises to 654.38+0.50 yuan, the investor's income is 654.38+0.00 million yuan.

Extended data:

Two key ratios of margin financing and securities lending:

1. Margin ratio refers to the ratio between the margin paid by investors when they buy financing and the amount of financing transactions. The calculation formula is: margin ratio = margin/(number of securities purchased by financing× purchase price )×100%.

When investors buy securities by financing, the financing margin ratio shall not be less than 100%. That is, the amount of investors' financing transactions shall not be higher than the total margin.

2. Margin ratio refers to the ratio of margin paid by investors when they sell their securities, and the calculation formula is: margin ratio = margin/(number of securities sold by margin × selling price) × 100%.

When investors sell securities by short selling, the margin ratio for short selling shall not be less than 50%. In other words, the amount of investors' securities lending transactions shall not be higher than 200% of the margin.

References:

Baidu encyclopedia-margin trading