1. Basis risk: Basis is the difference between the spot price of a commodity at a specific location and the price of a specific futures contract of the same commodity. Basis = spot price-futures price.
2. Risks caused by differences in contract varieties: The risks caused by differences in contract varieties refer to similar contract varieties, such as Nikkei 225 stock index futures and Tokyo stock index futures, whose prices change differently under the influence of the same factors. There are two situations:
(1) is the opposite direction of price change.
(2) The range of price changes is different. The price difference of similar contract varieties under the same factors also constitutes the risk of contract variety difference.
3. Subject matter risk: The subject matter of stock index futures is the overall price level of various stocks in the market. Due to the particularity of the subject matter design, its specific risks cannot be completely locked. From the technical point of view of hedging, the hedgers of commodity futures, interest rate futures and foreign exchange futures can completely lock in risks by establishing the consistency in the number of spot and futures contracts and the opposition in the trading direction in a certain period of time. However, due to the particularity of the subject matter, the consistency between spot and futures contracts is only of theoretical significance, and it is not practical. Due to the comprehensiveness in the design of stock index and the consideration of weight factors in the design, when the stock variety and weight are completely consistent with the index in the stock spot portfolio, the risk can be completely locked, and the feasibility in actual operation is almost zero. Therefore, the particularity of the subject matter of stock index futures makes it impossible to completely hedge between futures and spot, so the risk will always exist.
4. Risk of delivery system
Stock index futures are liquidated by cash delivery. Compared with other financial derivatives settled by physical delivery, there is greater delivery system risk. For example, interest rate futures trading, spot bonds that meet the specifications can meet some delivery requirements anyway. Stock index futures can only be delivered in 100% cash and cannot be closed with the corresponding stocks.