(Yicai Global) Sept. 1 -- In the first eight months of the year, the total balance of margin buying in the Shanghai Stock Exchange and the Shenzhen Stock Exchange hit CNY941.7 billion (USD143 billion), the highest since the end of 2016.

Accounting for 2.14 percent of the market value of stocks in circulation, the balance of margin buying up to Aug. 31 was CNY941.7 billion, with a further CNY6.55 billion yuan added yesterday compared with the previous trading day.

The outstanding balance of short selling was CNY4.7 billion, decreasing by CNY267 million from the previous trading day.

In China's financial markets, margin buying allows investors to pledge securities you already own to leveraged purchase of additional securities. Short selling refers to the selling of securities which the traders does not own, but are borrowed from a broker, using the cash as collateral.

The increase in margin buying usually indicates that investors are optimistic about the market in the short-term.