Look at it this way. When the price of copper is high, the premium of copper is relatively low. Why buy at a high price at this time? Because the article says that the price is expected to fall. When the price is low, the premium is rising. Pay attention to what the premium increase means, indicating that the spot price has fallen more than futures. At this time, the price is calculated, that is to say, only the spot purchase of the forward contract is determined. When the price is favorable to you, that is, when the sum of the purchase price and the premium drops, the purchase price is determined and the spot is purchased. Spot price, short selling futures, is characterized by buying spot at a high level (the purchase price is determined) and selling futures and opening positions (provided that the expected price falls). When the price falls, the spot purchase price is high and the futures closing price is low, making money. Futures profits make up for spot losses and actually reduce the spot purchase price.
When the copper price is low, the premium is high. At this time, a good way is to buy long futures (in order to make a profit in futures and make up for the spot premium). When the price rises appropriately and the premium decreases, you can buy the spot and close the futures. At this time, the premium is low and the purchase price is high, but the futures profit makes up for the loss of high purchase price caused by the increase of spot price, which actually reduces the purchase price. (Note that when the price rises, the premium of spot to futures will decrease. It shows that the increase of futures price is greater than spot price, that is, futures profit is greater than spot loss, which reduces the cost. )
Supplementary answer: Yes, the futures price will converge to the spot price after delivery, but generally speaking, the settlement price and spot price of futures delivery will not be exactly the same. Therefore, it is wrong to understand the copper price of the month as the spot price. What is the relationship between spot price and futures price? The premium mentioned in this paper refers to a value that the spot price is higher than the futures price. Premium means the spot price is higher than the futures price. At this time the spot price is the futures price+premium. If the premium is negative, it is also called discount. Then the spot price is the futures price+discount (the discount here is a negative premium, which means that the spot price is less than the futures price). Therefore, "the price of copper purchased by enterprises is the sum of the current copper price and spot premium of Shanghai Futures Exchange." The meaning of this sentence is actually a way to determine the spot price through futures prices and discounts, rather than directly determining the spot price through spot trading. Is a more flexible way.
Premium refers to the difference between the spot price and the futures price of the current month or the latest month. For example, the spot price 1 1 is related to the futures price 1 1. If it is agricultural products, such as wheat, if this discount is discussed in June, then there will be no contract in June. What we are talking about is a price relationship between the spot price in June and the futures price in July.
You can look at the global metal mesh for details.