Derivative Markets: Futures market, bonds market, stock market, foreign exchange market, etc. In modern time, most of the fundamental value of the commodities is implemented through the derivative markets. The global resources can be reallocated at the global level through derivative markets. China has become an intrinsic part of the international financial market now more than ever. One of the most important tasks of the derivative markets in China is against financial risks that are transferred from the developed countries. However, derivative markets remain at an infant stage in China.
Risk Management: Proper margin levels are very important to futures markets. When the margins are too low, they will easily lead to default risks, and consequently, brokers as well as exchanges will face a huge market risk. But too high margin levels will cause high transaction costs for investors and reduce market liquidity. The static level of futures margins in China is not sensitive to fluctuations. Sometimes, these margin levels cannot cover the risk enough when the market fluctuates severely.
Gold Futures Market: In July 2010, six departments including the People’s Bank of China issued a file jointly requesting to develop the gold market to improve the competitiveness of the financial market and the ability to deal with crises. Therefore, it is practically significant to study the gold futures market characteristics and risk control. However, gold futures did not draw much attention from scholars in the academic area. There are very few related academic researches. My research adopted the financial time series method to create a complete measuring system for Chinese gold futures.
