Futures refers to the trading of forward contracts for buying and selling standardized commodities or financial assets in fixed trading places.

Futures, generally including commodity futures and financial futures, is a common way of investment and financial management. Stocks, foreign exchange, gold, financial management and bonds all belong to the financial field.

Second, the connotation of financial futures

Financial futures refers to a binding standardized contract in which both parties buy and sell a financial instrument at an agreed time and price in the financial market. Futures contracts with financial instruments as the subject matter.

Third, the classification of financial futures

Financial futures are generally divided into three categories: currency futures, interest rate futures and index futures.

Fourth, the function of financial futures.

The important function of financial futures trading is to provide a means of hedging. The hedging provided by financial futures trading mainly includes:

1, sell hedge

This kind of hedging, also called short futures hedging, refers to the use of interest rate futures trading to avoid the risk that the future interest rate rise will lead to the decline in the value of bonds held or the increase in the scheduled borrowing cost; Or use forex futures trading to avoid the risk that the value of foreign currency assets held will decrease and the value of foreign exchange income will decrease in the future.

Step 2 buy a hedge

Buying hedging, also known as long futures hedging, refers to the use of interest rate futures trading to avoid the risk that the future interest rate decline will lead to a decrease in the scheduled interest rate of bond investment (the bond buying price will rise); Or use forex futures trading to avoid the risk of the increase of scheduled foreign exchange payment in local currency caused by the rise of foreign exchange rate in the future (that is, overpaying in local currency).

3. Direct hedging

Direct hedging refers to the use of the same goods as the spot, which needs to be hedged to avoid risks.

Step 4 hedge each other

Mutual hedging means that there is no commodity in the futures market that is the same as the spot to be hedged, and the commodity with the closest interest rate linkage is used to avoid risks.

5. Price discovery function

The price discovery function refers to the function of forming futures prices through centralized bidding in an open, fair, efficient and competitive futures market.