Legal Implications of Brokers’ Offsetting of FuturesPosition on Behalf of the Principal:A Case Study of the0206 Options Idcident

• Main Authors: Chia-Chen Hsieh, 謝佳珍
• Other Authors: 唐代彪
• Format: Others
• Language: zh-TW
• Published: 2019
• Online Access: http://ndltd.ncl.edu.tw/handle/hec9uf

碩士 === 國立臺灣大學 === 國家發展研究所 === 107 === This paper mainly discusses the legal issues on futures brokers offset the futures position on behalf of the principal (hereafter referred to as “offset mechanism "). After studying literatures and understanding the main operations of the futures market, the conclusions are as follows: Futures trading is a margin trading. The main purpose of the offset mechanism is to avoid the occurrence of default and stabilize the settlement in the futures market. This is one of the duties as good administrators to the futures brokers. Before accepting new accounts and futures orders., futures brokers should inform futures traders the nature and potential risks of the futures and the losses may be caused from the trading. Therefore, informing the futures traders the risks of the futures is very critical in the futures trading. Futures brokers and futures traders have signed a commission contracts in agreement with offset mechanism before the order is placed. Therefore, once the specific conditions have been met, the futures brokers should execute the offset. If the futures brokers don’t execute the offset and violate the duty of good administrators, the futures traders should undertake the loss resulting from the offset mechanism. Due to the changing speed in the futures market is very fast, it is difficult for futures brokers and futures traders to realize the instantaneous changes in the futures prices. In order to solve the futures offset mechanism disputes caused by the human judgment, using computer to offset the position of the futures can provide more reasonable and transparent trading procedure. Moreover, in order to reduce disputes between brokers and traders, futures trader should also strengthen the management of futures margin and raise awareness of the trading risks to reduce futures trading disputes with futures broker.