Researchon Risk of Large Agricultural Futures Market based on Price Bubble Model

Yijun Zhang

FanLiBusinessSchool, NanyangInstitute of Technology, Nanyang,473000,China

Abstract: Based on the study of price bubble model, the theory andanalysis method of price bubble are introduced, and three risk assessmentindexes, namely, "bubble length", "bubble frequency" and"bubble strength", are established for China's agricultural futuresmarket. The historical risk of China's agricultural futures market isevaluated. Through the risk assessment of agricultural products futures, it isdivided into three risk levels: high, medium and low, and the riskcharacteristics and regulatory connotation of each grade of commodities aresummarized. Based on real data, this paper empirically analyzes the causalrelationship between agricultural products and futures price volatility, yield,position and trading volume volatility. Through the analysis, it is consideredthat the functional attributes of commodities cannot fully reflect the riskattributes of commodities, and the risk supervision system of agriculturalproducts futures market should be improved according to the principle of"hierarchical management, prevention first". Based on this, thespecific countermeasures and suggestions are put forward.

Keywords: Price bubbles; Agriculturalproducts; Futures; Market risks