What does the fusing mechanism mean? What is the difference between the overall deployment lockdown mechanism and the limit plate?

What does a-share fusing mechanism mean?

The A-share fusing mechanism refers to the suspension of trading for 15 minutes when the CSI 300 Index triggers the 5% fusing threshold value, and the triggering of the 7% fusing threshold value at any time throughout the day will suspend the trading to the closed market.

When will the-share circuit breaking mechanism be implemented?

The A-share circuit breaking mechanism was officially implemented since January 1, 2016. ps: a circuit breaking mechanism was launched in the United States as early as 1988, but it has been triggered once so far. Today is the first day of the implementation of the-share circuit breaking mechanism, I triggered two face attacks in the drive. Have you done anything.

 

What is the difference between the overall deployment lockdown mechanism and the limit plate?

The overall deployment lockdown mechanism suspends the transaction buffer mechanism and can continue trading after a period of time. After the suspension, the transaction cannot continue with the unilateral transaction. A complete disconnection. Unless Reverse order mounting is relatively rigid, it is not conducive to transaction continuity. China's limit on the rise and fall is a stock, and the US exchange is based on an index. As a result, the overall deployment lockdown occurs much less frequently. China's daily limit is that as long as it reaches 10%, it cannot trade at a higher or lower price. The US exchange has different fusing layers (for example, the New York Stock Exchange has three levels based on S & P's 7%, 13%, and 20% ), the overall lockdown mechanism varies at each level (for example, the first and second layers of the New York Stock Exchange suspend trading for 15 minutes, and the third layer is to stop trading for the whole day ). In addition, the US lockdown only cares about the decline, and they will not be able to handle the increase.

Impact of the overall deployment lockdown mechanism on the stock market

The disadvantage of the circuit breaking mechanism is that the suspension of transactions is a direct intervention to the market, and many investors do not want to sacrifice their free trading rights. The limit on the price limit has a greater impact on the market than that on the price limit mechanism, while the price limit is a direct intervention. Therefore, the introduction of the price limit on the price limit will further affect the market freedom, it is detrimental to the long-term development of the market.

What is the fuse mechanism in the Chinese version and the key to triggering it?

So what is the overall fusing mechanism?
Simply put, the fusing mechanism, that is, the automatic suspension mechanism, refers to the transaction suspension measures to control risks when the fluctuation of the stock index reaches the specified fusing point.
How does China's circuit breaking mechanism work?
1. Benchmark index for overall deployment lockdown: Shanghai and Shenzhen 300!
2. Overall deployment lockdown: all stocks listed on the Shanghai and Shenzhen stock exchanges, convertible bonds, convertible bonds, stock options, and all stock index futures contracts of CICC. (Treasury bond futures trading is normal)
3. Determine the fusing time based on the two-phase fusing threshold:
①, 5%: when the Shanghai and Shenzhen 300 index rose or fell, triggering a 5% threshold value, the transaction was suspended for 15 minutes, the overall auction was closed, and the transaction continued on the same day. At and later, the 5% fusing threshold is triggered to suspend the closing of the transaction.
②, 7%: the rise or fall of the Shanghai and Shenzhen 300 index during any time throughout the day triggers the 7% fusing threshold and suspends the transaction to the closed market.
Special Period of deployment lockdown mechanism:
1. Deployment lockdown is not implemented in the opening auction phase.
2. If the overall deployment lockdown market is insufficient in the morning, it will be supplemented after the start of the afternoon.
3. Overall deployment lockdown mechanism
4. The stock index futures delivery date is only implemented in the morning. No matter the transaction is suspended due to hitting 5% or 7%, the transaction will be resumed in the afternoon.
6. If a listed company plans to withdraw from the board within the same period as the index, the board must be resumed until the index is terminated.
EXPERT COMMENT
The index fusing mechanism is an innovative mechanism based on international advanced experience. As one of the important measures to "build the market", its launch will be conducive to restraining the stock index from irrational skyrocketing and slump, this prevents large fluctuations in the overall market and helps stabilize the-share market.
The fusing mechanism can be divided into "melting and breaking" and "melting and continuously ":
"Melting and breaking", when the price hits the melting point, the transaction will be stopped in the next period of time
"Melting and continuous", the price can continue trading after hitting the melting point, but the quotation is limited within the melting point
The circuit breaking mechanism has three levels:
1. The overall deployment lockdown mechanism fell by 500 in the S & P 5% index, and the system was suspended for 15 minutes.
2. When the index drops by 10%, it is closed for one hour.
3. Shut down the stock market for one day when it plunged 20%
The origin of the circuit breaking mechanism:
In order to avoid the recurrence of such a stock disaster in October 19, 1987, the U.S. Commodity Futures Commission (CFTC) and the Securities and Exchange Commission (SEC) approved the lockdown mechanism of the New York exchange and the Chicago commercial exchange in 1988.
In June August 24, Pan Qian, S & P, Nasdaq, and Dow Jones futures both fell by 5%, triggering the overall lockdown mechanism, leading to the suspension of transactions on the three major U.S. exchanges, so what is the overall circuit breaking mechanism?
Tips
In addition to the overall lockdown, the SEC also sets a mechanism for individual stocks to "restrict the upper and lower limits of price fluctuations": the price has increased or decreased by more than 5% within 15 seconds, and the transaction will be suspended for 5 minutes, however, the price fluctuations between the opening and closing prices and individual stocks whose prices do not exceed 3 US dollars can be relaxed to 10%.
[How the overall deployment lockdown mechanism affects A-share stock market growth]
① Huabao Securities: during the overall lockdown period, if the purchase and redemption are not adjusted, the shares of public funds may face a huge amount of redemption.
② Galaxy Securities: the suspension of trading caused by the fusing mechanism may lead to distortion of the closing prices of some stocks and affect the valuation of public funds.
③ Ping An Securities: at present, we have not observed that the overall lockdown will cause a sharp decline in transaction volume, so we don't have to worry too much about the impact of the lockdown mechanism on stock liquidity.
Six issues that you need to pay attention to after the overall lockdown of the stock market
Question 1: How can I place an order and withdraw the order during the overall deployment lockdown period?
If the circuit breaking ends before, the Shanghai and Shenzhen stock exchanges can place and withdraw orders. If it continues until, the Shanghai Stock Exchange [Weibo] will only accept withdrawal orders, and the Shenzhen Stock Exchange [Weibo] will place an order to withdraw the orders. You cannot place or withdraw an order within 12 minutes from the start of the [microblogging] deployment lockdown of the gold Institute. You can place or withdraw the order within 13th minutes, but enter the auction. During the index melting period, the resumption of the relevant securities will be extended until the index melting period ends.
Question 2: How can I resume the transaction after the circuit breaking?
When the deployment ended before, the Shanghai and Shenzhen stock exchanges made a joint auction for accepted applications, and then made a continuous auction. CICC starts the auction within 12 minutes from the start of the deployment lockdown. The auction starts from 13th minutes to 15 minutes.
Question 3: How is the closing price formed?
If the transaction is closed at, the closing price of the relevant securities is the weighted average transaction volume (including the last transaction) of all transactions in the previous minute of the last transaction of the same day, the previous closing price is the current day's closing price.
Question 4: What should I do with Shanghai-Hong Kong stock exchange?
Shanghai-Hong Kong Stock Connect is implemented in accordance with the Shanghai stock exchange regulations at the above 3rd points.
Question 5: What should I do in bulk transactions?
If the overall lockdown is completed before, the bulk transaction will proceed normally. If the overall deployment lockdown lasts until, bulk transactions cannot be conducted on that day.
Question 6: What should I do with CEN?
If the circuit breaking is completed before, the lending, matching, and return operations will be conducted normally. If the overall deployment lockdown lasts until, the Shanghai Stock Exchange will not accept new lending and borrowing applications, and the accepted transactions will be postponed to the next trading day. The Shenzhen Stock Exchange will stop lending and borrowing, the return date shall be postponed to the next trading day.