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What is the significance of margin trading?

The significance of margin trading is multifaceted, not only for investors, but also for securities companies and the entire securities market.

Margin trading can increase market trading volume, invigorate securities trading, enhance the liquidity of the securities market, help the market operate more efficiently, and improve market pricing efficiency.

Margin trading provides the market with securities trading activities in the opposite direction, which helps stock prices to be reasonable. Investors trade by borrowing funds or securities, which more fully reflects their views and expectations on the market and promotes price discovery in the market.

Margin trading provides a short-selling trading method, changing the "one-sided market" situation in the securities market. Margin trading allows investors to make profits by selling short when the market falls. The establishment of a two-way trading mechanism helps reduce the probability of unilateral speculative market trends and maintain market stability.

Margin trading increases the channels for securities companies to use their own funds and securities, improves the efficiency of using financial assets, and increases the profits of securities companies.