The role of leverage is to increase the small scale. Leverage mechanism is a futures term, which means that a large amount of money can be invested with a small amount of money, and it is generally used together with the margin system.
Control the overall value of futures contracts with relatively little funds, that is, use 5% to 10% of funds to trade 100%. However, futures investors should fully realize that high returns are behind high risks.
Therefore, people who step into the futures market should have a sense of taking risks and be prepared for possible losses. In addition, because the rules and practices of futures trading and securities trading have many similarities and differences with general spot trading, people who enter the futures market should also understand and master some necessary futures trading knowledge.
Main characteristics of extended data
1, small and wide. Futures trading only needs to pay 5- 10% performance bond, and it can complete several times or even dozens of times of contract transactions. Due to the leverage effect of the futures trading margin system, it has the characteristics of "small and wide", and traders can use a small amount of funds to conduct large transactions, saving a lot of working capital.
2. Two-way transaction. In the futures market, you can buy first and then sell, or you can sell first and then buy, so the investment method is flexible.
3. Don't worry about performance. All futures transactions are settled through the futures exchange, which becomes the counterparty of any buyer or seller and provides guarantee for each transaction. So traders don't have to worry about the performance of the transaction.
4. Market transparency. Trading information is completely open, and trading is conducted by means of open bidding, so that traders can compete openly under equal conditions.
5. Tight organization and high efficiency. Futures trading is a standardized transaction with fixed trading procedures and rules, which are linked one by one and operate efficiently. A transaction can usually be completed in a few seconds.
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