The World’s Biggest Stock Index Futures Market Just Got Killed

Chinese stock market has taken a $3 trillion rout in the past few weeks. Things are highly volatile in the Chinese stock market. Chinese regulators have pumped in more than $200 Billion in the past few weeks in an attempt to stem the rout.

Volumes in the country’s CSI 300 Index and CSI 500 Index futures sank to record lows on Tuesday after falling 99 percent from their June highs. Ranked by the World Federation of Exchanges as the most active market for index futures as recently as July, liquidity in China has dried up as authorities raised margin requirements, tightened position limits and started a police probe into bearish wagers.

 

The Shanghai Stock Exchange announced plans Monday to adopt a new measure to pause trading on the country’s three mainland exchanges if the markets are moving wildly in any direction. The move is in response to a recent massive sell-off of Chinese stocks that has drained $5 trillion of their value since their June peak.