At present, investors engaged in futures trading in China are roughly divided into natural persons and enterprises. The purpose of its futures can be roughly divided into speculation and hedging; Natural persons are mainly speculative, and enterprises only need to hedge and deliver more. Futures is margin trading, which is the charm of futures and the high risk of futures.

The risk of cotton yarn futures trading;

1. Risk of fund management

Position-holding stage: the risk price changes unfavorably due to forced liquidation, the capital chain breaks, and the margin cannot be replenished, resulting in the actual loss of position loss.

2. Liquidity risk

Refers to the possibility of losses caused by failure to realize or close positions quickly, including the risk of being unable to offset or hedge positions.

3. Operational risk

Operational risk mainly refers to the risks caused by problems in the operation process when investors conduct futures trading. It is divided into the following three situations: 1) wrong order direction 2) wrong order quantity 3) confusing opening and closing positions.

4. Market risk

Market risk refers to price risk, that is, the uncertainty of cotton yarn futures contract price changes caused by market price fluctuations. When the expected price of cotton yarn futures changes inversely with the actual price, investors will suffer losses. Due to the leverage effect of futures trading, slight price fluctuations may lead to great risks. When customers are unable to repay, the risk will be transferred to futures brokerage companies or even exchanges.

5. Legal risks of violation of regulations and breach of contract

Risk of violation: do not understand the regulations and contract terms, and conduct unfair market transactions in violation of regulations.

6. Technical risks