Do you need margin for stock index futures trading?
Yes, trading stock index futures requires margin. When buying and selling futures contracts, both parties need to pay a small sum of money to the clearing house as performance guarantee. This money is called a deposit. After a certain period of time, the two parties trade the price level of the stock index and make delivery by cash settlement of the price difference.
Buying a contract for the first time is called building a long position, and selling a contract for the first time is called building a short position. Then the contract at hand will be settled daily, that is, the market will be marked day by day.
Historically, futures trading has been conducted in the trading hall through oral bidding by traders. At present, most futures transactions are completed through electronic transactions. When trading, investors input buying and selling orders through the computer system of the futures company, and the matching system of the exchange conducts matching transactions.
You don't have to hold a trading position until it expires. You can reverse trade at any time before the expiration of the stock index futures contract to reverse the original position. This kind of transaction is called liquidation.
For example, stock index futures contracts sell 10 on the first day and buy back 10 on the second day. Then the first one is the short position of opening 10 stock index futures, and the second one is the short position of closing 10 stock index futures. The next day I bought 20 lots of stock index futures contracts, and then I became a long position in 20 lots of stock index futures. Then sell 10 lots, which is called liquidation 10 stock index futures bulls, leaving 10 stock index futures bulls. A contract that is not closed at the end of a day's trading is called a position. In this example, on the first day after trading, the stock index futures with the position of 10 are short, and on the second day after trading, the stock index futures with the position of 10 are long.
The main functions of stock index futures include: risk management of stock portfolio; Arbitrage by stock index futures; Stock index futures can also be used as a leveraged investment tool. If you want to operate stock index futures, you need to meet the threshold for opening an account.