The so-called futures, as the name implies, are goods that are to be delivered in a certain period in the future, but in fact they are a standardized contract that can be repeatedly transferred and bought and sold.

second, what is futures trading

futures trading is a trading method of buying and selling standardized contracts of various commodities in the futures exchange based on margin.

Third, the economic function of futures trading

Discover prices, avoid risks and invest in tools.

fourth, the purpose of futures trading

hedging or speculation.

V. Characteristics of futures trading

1. Commodity contractualization: Futures trading is the buying and selling of contracts. Both parties do not rely on the spot, but through established standardized contracts, and physical goods do not directly enter and leave the futures market.

2. Contract standardization: Futures contracts are standardized contracts, and the only variable is price. Other factors such as quantity, quality, delivery time and place are uniformly stipulated by the exchange.

3. Leverage of funds: Futures trading is conducted with a margin of 5-1% as the guarantee, so it has the leverage of small and broad.

4. Open trading: Futures trading is conducted in public (in the exchange) by free bidding, not in private.

5. Documentalization of delivery: Futures delivery is the process in which the seller delivers the warehouse receipt and the buyer delivers the payment voucher, both of which are legally recognized and protected commercial bills.

VI. Operating mechanism of futures trading

1. Bidding system: The futures market is a standardized market, and transactions are made through public bidding according to the principle of "price first, time first and quantity first".

2. Margin system: Margin is a financial guarantee of the settlement department of the futures exchange, which is divided into initial margin and additional margin. The initial margin generally only accounts for 5-1% of the total amount, which is generally consistent with the transaction risk to ensure the performance of the contract. If the customer has a virtual loss, he needs to pay an additional deposit.

3. daily settlement system: futures trading shall be marked to market daily and be debt-free. That is, according to the daily transaction, liquidation, position and profit and loss, the deposit is recovered in accordance with the regulations, thus ensuring 1% contract performance rate.

4. Hedging system: Hedging means trading in the same variety and quantity as the original transaction but in the opposite direction, thus ending the performance responsibility of the original contract. The process of hedging is essentially the process of changing hands.

5. delivery system: the essence of delivery is to combine the futures market with the spot market, and if the original contract is not hedged before the last trading day, the physical goods should be delivered. The clearing system is adopted for delivery, and the delivery procedures are stipulated. The seller provides warehouse receipts and the buyer provides payment vouchers. The methods for seller members to obtain warehouse receipts are as follows: first, purchase warehouse receipts from designated warehouses designated by the exchange; The second is to deliver their own goods to the designated warehouse in advance, and issue warehouse receipts after acceptance; The third is to buy warehouse receipts at the exchange warehouse receipt auction.

6. Position restriction: refers to the restriction on the number of futures contracts. In short, it is stipulated that "you can buy and sell as much money as you have."

7. Price range limit: that is, a range is floated up and down on the basis of the settlement price of the previous trading day, and traders can only trade within this price range on the same day.

VII. Who can conduct futures trading

Participants in futures trading can be divided into two categories, one is called hedgers, and the other is called venture capitalists. Hedgers mainly use futures trading to transfer the risk of spot trading, so as to achieve the purpose of reducing costs and stabilizing profits. When the time is good, they will also use physical commodity trading as a "backing" to make speculative profits. Venture capitalists mainly use futures trading as an investment method similar to stocks and real estate to pursue high profits.

participants in hedging can be commodity producers, marketers, processors, importers and exporters, creditors and debtors in various industries.

producer: commodity production needs a cycle, during which price changes will affect the profits of producers. If you participate in futures trading during the production cycle, you can fix your profits in advance. If you choose the right time, you can not only stabilize your profits, but also get an extra income.

Marketer: It takes a period of time for goods to be purchased and sold. Futures trading can not only flexibly choose the timing of purchase and sale, but also reduce the storage cost and preserve the value of the goods in stock.

processors: it takes a period of time from the purchase of raw materials to the actual use, and it takes a period of time from the input of raw materials to the sale of finished products. No matter the price of raw materials or finished products changes adversely, it will bring unnecessary losses. Therefore, wise processors need to participate in two types of hedging, namely, short-selling hedging of raw materials and short-selling hedging of finished products, which can not only preserve the value of purchased raw materials and finished products in the future, but also flexibly choose the timing of purchasing raw materials or selling finished products to reduce their inventory costs.

Importer and exporter: It takes a period of time from delivery to delivery, and there is usually a problem of currency exchange in payment, and adverse changes in the price or exchange rate will bring unnecessary losses. Although many measures to avoid risks have been formulated in international trade, such as FOB and CIF. However, it is difficult for them to achieve their goals completely, and it takes time and effort to negotiate repeatedly. At the same time, taking part in the hedging of goods and foreign exchange can not only stabilize profits, but also save a lot of trouble.

debtors and debtors: whether creditors or debtors, if the interest rate fluctuates during the period from lending to repayment, one of them will suffer certain losses. If there is currency exchange between borrowing and paying debts, exchange rate fluctuations will also cause additional losses to one of them. In order to avoid these risks, the best choice is to participate in financial hedging.

There are many participants in venture capital. Anyone who has capital and wants to pursue a high rate of return can participate in the venture capital of futures trading, but those with strong strength can participate directly, and those with insufficient funds need to participate in a fund indirectly.

you will find it more attractive to participate in futures trading than to invest in real estate and stock industry, but at the same time, you should be aware of risks and make necessary preparations.