Higher leverage ratio
In Britain, a futures trading account with an initial margin of only 2,500 pounds, the trading volume of the Financial Times 100 index futures can reach 70,000 pounds, and the leverage ratio is 28: 1. Because the amount of margin payment is determined according to the market value of the index futures traded, the exchange will decide whether to add margin or withdraw excess according to the price change of the market.
Market liquidity is high, and there are many ways of cash delivery, so futures contracts cannot be held indefinitely when they expire;
Low transaction cost
Compared with spot trading, the cost of stock index futures trading is quite low. The cost of index futures trading includes: trading commission, bid-ask spread, opportunity cost of paying margin and possible tax. For example, in Britain, futures contracts do not need to pay stamp duty, and buying index futures only needs one transaction, while buying a variety of stocks (such as 100 or 500) needs multiple transactions, with high transaction costs. In the United States, a futures transaction (including the complete transaction of opening and closing positions) only charges about $30. Some people think that the transaction cost of stock index futures is only one tenth of the stock transaction cost. By implementing the margin system and using the leverage principle, investors can get multiple times of expected annualized expected returns under certain risks;
Provide more convenient short selling operation.
A prerequisite for short selling is that you must borrow a certain number of shares from others first. There are no strict conditions for short selling abroad, which makes it difficult for all investors to complete short selling in the financial market. For example, in Britain, only securities market makers can borrow British stocks; American Securities and Exchange Commission rule 10A- 1 stipulates that investors must borrow shares through securities brokers and pay a certain amount of related fees. Therefore, short selling is not suitable for everyone. The trading of index futures is not like this. In fact, more than half of index futures trading includes short selling positions.
Capital allocation does not charge interest, but only charges a handling fee, which reduces the cost pressure and trading psychological pressure of investors, improves the possibility of profit, supports two-way trading, and can buy up and not buy down in both bull and bear markets.
Research shows that the liquidity of stock index futures market is obviously higher than that of spot stock market. For example, 199 1, the trading volume of FTSE-100 index futures has reached 8.5 million pounds.
Judging from the development of foreign stock index futures market, the investors who use stock index futures the most are the investment managers of various funds (such as mutual funds, pension funds and insurance funds). In addition, other market participants mainly include underwriters, market makers and stock issuing companies.
T+0 trading mode, free trading on the same day, unlimited times, flexible operation;
The stock index futures market trades according to the economic index of the stock market, avoiding the phenomenon of "only increasing the index without making money"
The funds are entrusted by the bank, and the funds are bound to their own bank card accounts through futures trading accounts.
The allocation of funds of 1: 10 lowers the investment threshold, and realizes that investors' own funds are small and wide under certain risks.