scholarly journals DO CIRCUIT BREAKERS IMPEDE TRADING BEHAVIOR? A STUDY IN CHINESE FINANCIAL MARKET

2019 ◽  
Vol 64 (05) ◽  
pp. 1-18
Author(s):  
KUN LI
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Circuit Breaker ◽  
Market Liquidity ◽  
Trading Behavior ◽  
Circuit Breakers ◽  
Short Life ◽  
Large Market ◽  
Magnet Effect ◽  
Negative Impacts

As the most influential regulation in 2016, China launched circuit breakers in the financial markets. However, the circuit breaker mechanism was implemented for only four days and then suspended. Many criticisms then stated that circuit breakers impeded trading behavior in Chinese financial markets. This study explores this short-life circuit breaker mechanism in China, and examines whether circuit breakers impede trading behavior in Chinese financial markets as many criticisms stated. We use an intraday dataset and investigate the circuit breakers. Contrary to those criticisms, we find that circuit breakers are not easily reachable and have no “magnet effect” between two thresholds of breakers. We also find that without protection of circuit breakers, potential large market fluctuations will have negative impacts on individual stocks’ liquidity and value. As the major contribution, our study indicates that Chinese financial markets still need a circuit breaker mechanism to protect investors’ benefits and maintain the market liquidity and stability.

Financial market liquidity, returns and market growth: evidence from Bolsa and Börse, 1902–1925

2010 ◽  
Vol 17 (1) ◽  
pp. 73-98 ◽  
Author(s):  
Lyndon Moore
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Growth And Development ◽  
Important Determinant ◽  
Market Liquidity ◽  
Cross Sectional ◽  
Data Set ◽  
Liquidity Shocks ◽  
Market Growth ◽  
Unique Data

The article is based on a unique data set of securities traded on the Madrid Bolsa and the Zurich Börse between 1902 and 1925. We examine the pricing of liquidity and demonstrate that the liquidity level of securities was an important determinant of cross-sectional returns. Factors that are usually found important in contemporary markets, such as securities' sensitivity to market-wide liquidity shocks and market movements, turn out to have been irrelevant in the early twentieth century. In addition, the illiquidity of the Madrid market appears to have modestly slowed capital raising there. Our results suggest that market liquidity was an important determinant of the growth and development of financial markets.

scholarly journals Cognitive modeling of factors of financial market stability of Russia

2020 ◽  
Vol 25 (3) ◽  
pp. 287-307
Author(s):  
N.L. Badvan ◽  
O.S. Gasanov ◽  
A.N. Kuz'minov
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Financial Stability ◽  
Cognitive Modeling ◽  
Cumulative Effect ◽  
Policy Formation ◽  
Market Liquidity ◽  
Constant Attention ◽  
Market Stability ◽  
Financial Market Stability

Subject. The paper highlights the financial market stability. It is one of the most important components of economic growth ensuring. Objectives. The article is to draw up a cognitive map of the Russian financial market. It also aims at modeling changes in its segments and finding the main stability factors of the national financial market. Methods. The research involves methods of cognitive analysis and cognitive modeling. Results. Cumulative effect of all segments of the financial market forms its stability. The Russian financial market is most sensitive to changes in the monetary and currency markets, corporate and government borrowing market. There is a significant relationship between the market liquidity and its stability. It is necessary to form free resources storage in ruble assets. The dependence of the domestic market on international financial markets remains despite sanctions restrictions. Conclusions and Relevance. Achieving financial stability requires constant attention to liquidity in the market and predictability of the national currency. The priority direction of the state financial policy is establishment of relations between the leading players in the world financial markets and international financial institutions. Experts can apply the results of this work in the financial and monetary policy formation.

Intraday price jumps, market liquidity, and the magnet effect of circuit breakers

2020 ◽  
Vol 70 ◽  
pp. 168-186
Author(s):  
Zhihong Jian ◽  
Zhican Zhu ◽  
Jie Zhou ◽  
Shuai Wu
Keyword(s):  
Market Liquidity ◽  
Circuit Breakers ◽  
Magnet Effect

scholarly journals Liquidity Risk and Investors’ Mood: Linking the Financial Market Liquidity to Sentiment Analysis through Twitter in the S&P500 Index

2019 ◽  
Vol 11 (24) ◽  
pp. 7048 ◽  
Author(s):  
Francisco Guijarro ◽  
Ismael Moya-Clemente ◽  
Jawad Saleemi
Keyword(s):  
Financial Markets ◽  
Sentiment Analysis ◽  
Financial Market ◽  
Market Liquidity ◽  
Trading Costs ◽  
Financial Decisions ◽  
Area Of Interest ◽  
Liquidity Measures ◽  
The Impact ◽  
The Relationship

Microblogging services can enrich the information investors use to make financial decisions on the stock markets. As liquidity has immediate consequences for a trader’s movements, this risk is an attractive area of interest for both academics and those who participate in the financial markets. This paper focuses on market liquidity and studies the impact on liquidity and trading costs of the popular Twitter microblogging service. Sentiment analysis extracted from Twitter and different popular liquidity measures were gathered to analyze the relationship between liquidity and investors’ opinions. The results, based on the analysis of the S&P 500 Index, found that the investors’ mood had little influence on the spread of the index.

scholarly journals Valuing Peace: The Effects of Financial Market Exposure on Votes and Political Attitudes

Econometrica ◽  
2019 ◽  
Vol 87 (5) ◽  
pp. 1561-1588 ◽  
Author(s):  
Saumitra Jha ◽  
Moses Shayo
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Political Attitudes ◽  
Peace Process ◽  
Superior Performance ◽  
Financial Assets ◽  
Material Incentive ◽  
Nonfinancial Information ◽  
Political Messages ◽  
Economic Risks

Can participation in financial markets lead individuals to reevaluate the costs of conflict, change their political attitudes, and even their votes? Prior to the 2015 Israeli elections, we randomly assigned Palestinian and Israeli financial assets to likely voters and incentivized them to actively trade for up to 7 weeks. No political messages or nonfinancial information were included. The treatment systematically shifted vote choices toward parties more supportive of the peace process. This effect is not due to a direct material incentive to vote a particular way. Rather, the treatment reduces opposition to concessions for peace and changes awareness of the broader economic risks of conflict. While participants who were assigned Palestinian assets are more likely to associate their assets' performance with peace, they are less engaged in the experiment. Combined with the superior performance of Israeli stocks during the study period, the ultimate effects of Israeli and Palestinian assets are similar.

scholarly journals Solid-State DC Circuit Breakers and their Comparison in Modular Multilevel Converter Based-HVDC Transmission System

Electronics ◽  
2021 ◽  
Vol 10 (10) ◽  
pp. 1204
Author(s):  
Gul Ahmad Ludin ◽  
Mohammad Amin Amin ◽  
Hidehito Matayoshi ◽  
Shriram S. Rangarajan ◽  
Ashraf M. Hemeida ◽  
...  
Keyword(s):  
Solid State ◽  
High Voltage ◽  
Direct Current ◽  
Circuit Breaker ◽  
Transmission System ◽  
Simulation Software ◽  
Fault Current ◽  
Circuit Breakers ◽  
Hvdc Transmission ◽  
Dc Circuit Breakers

This paper proposes a new and surge-less solid-state direct current (DC) circuit breaker in a high-voltage direct current (HVDC) transmission system to clear the short-circuit fault. The main purpose is the fast interruption and surge-voltage and over-current suppression capability analysis of the breaker during the fault. The breaker is equipped with series insulated-gate bipolar transistor (IGBT) switches to mitigate the stress of high voltage on the switches. Instead of conventional metal oxide varistor (MOV), the resistance–capacitance freewheeling diodes branch is used to bypass the high fault current and repress the over-voltage across the circuit breaker. The topology and different operation modes of the proposed breaker are discussed. In addition, to verify the effectiveness of the proposed circuit breaker, it is compared with two other types of surge-less solid-state DC circuit breakers in terms of surge-voltage and over-current suppression. For this purpose, MATLAB Simulink simulation software is used. The system is designed for the transmission of 20 MW power over a 120 km distance where the voltage of the transmission line is 220 kV. The results show that the fault current is interrupted in a very short time and the surge-voltage and over-current across the proposed breaker are considerably reduced compared to other topologies.

Critical Value-Based Power Options Pricing Problems in Uncertain Financial Markets

2021 ◽  
pp. 2150002
Author(s):  
Guimin Yang ◽  
Yuanguo Zhu
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Numerical Experiments ◽  
Critical Value ◽  
The Other ◽  
Options Pricing ◽  
Underlying Asset ◽  
Pricing Problems ◽  
Fractional Differential ◽  
The One

Compared with investing an ordinary options, investing the power options may possibly yield greater returns. On the one hand, the power option is the best choice for those who want to maximize the leverage of the underlying market movements. On the other hand, power options can also prevent the financial market changes caused by the sharp fluctuations of the underlying assets. In this paper, we investigate the power option pricing problem in which the price of the underlying asset follows the Ornstein–Uhlenbeck type of model involving an uncertain fractional differential equation. Based on critical value criterion, the pricing formulas of European power options are derived. Finally, some numerical experiments are performed to illustrate the results.

Sign in / Sign up

Export Citation Format

Share Document