Margin trading refers to a form of leveraged investment practice that utilizes borrowed money to purchase stocks. Zhang also prohibited providing cash or any other assistance to the so-called “umbrella trusts,” which have been used to fund margin trading, during a meeting with fund managers and brokerages on Friday, according to media reports.
This is believed to be a big reason for the drastic rise in China’s Shanghai Composite index between June 2014 and June 2015. The rise comes on the heels of stringent market-stabilizing measures announced by the Chinese government and the country’s stock market regulator.
You should be aware of all the risks associated with foreign exchange and futures trading, and seek advice from an independent financial advisor if you have any doubts.
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