Futures trading is an organized trading method developed on the basis of spot trading and conducted by buying and selling standardized futures contracts on futures exchanges. In the futures market, most futures contracts bought and sold by traders are settled in the form of hedging before maturity. In other words, people who buy futures contracts can sell them before the contract expires; People who sell futures contracts can buy futures contracts to close their positions before the contract expires. It is allowed to buy before selling or sell before buying. Generally speaking, physical delivery in futures trading is only a small part. The object of futures trading is not the entity (subject matter) of commodities, but the standardized contract (subject matter) of commodities. The purpose of futures trading is to transfer price risk or gain risk profit. 7. What are the categories of futures trading? (1) Commodity futures trading Commodity futures are the origin of futures trading. With the development of the futures market, the scale of commodity futures trading has been expanding, and it has become one of the important components of the modern futures market system. Its functions of avoiding risks and finding prices are playing an increasingly important role in the operation of modern market economy. The varieties of international commodity futures trading are constantly changing with the development of futures trading, and there are more and more trading varieties. From the traditional agricultural futures, it has developed into a large number of primary products such as cash crops, livestock products, non-ferrous metals and energy. (II) Financial Futures Trading In the 1970s, the futures market made a breakthrough, and a large number of financial futures appeared and gradually occupied the leading position in the futures market. The prosperity of financial futures mainly benefits from the violent turmoil in the international financial market, and financial risks have attracted more and more attention. Many innovative exchanges have tried to launch financial futures contracts to meet people's needs to avoid financial market risks. With the success of many financial futures contracts, the futures market is full of vitality and has achieved rapid development. Financial futures mainly include foreign exchange futures, interest rate futures and stock index futures. 8. The basic process of futures trading The completion of futures trading is carried out through the organic connection of four components: futures exchange, clearing house, brokerage company and trader. First, the customer chooses a futures brokerage company and goes through the account opening formalities in this brokerage company. When the agency relationship between the customer and the brokerage company is formally established, they can issue trading instructions to the brokerage company according to their own requirements. After receiving the trading instructions from customers, the brokerage company shall immediately notify the company's representative in the exchange, write down the contents of the instructions and hand them over to the company's acquiring department. The market representative conducts the transaction according to the customer's instructions. At present, computer automatic matching is widely used in China. The settlement institution shall notify the brokerage company in writing after daily settlement. Brokerage companies also provide customers with settlement lists. If the customer asks to close the position, the process is the same as before. Finally, the market representative hedges (liquidates) the original position contract, and the brokerage company sends the liquidation statement to the customer. If customers don't close their positions, they will implement a daily mark-to-market system. When the book profit is settled at the settlement price of the day, the brokerage firm will pay the profit difference to the customer. If there is a book loss, the customer must make up the difference. The actual profit and loss can only be settled after the customer closes the position. Sina statement: the content of this article is purely the author's personal opinion, which is for investors' reference only and does not constitute investment advice. Investors operate accordingly at their own risk.