Its core is the relationship between supply and demand, that is, the power comparison between buyers and sellers. If more people buy, it will naturally go up, and vice versa.
Extended data:
Futures, whose English name is futures, is completely different from spot. Spot is actually a tradable commodity. Futures are mainly not commodities, but standardized tradable contracts based on some popular products such as cotton, soybeans and oil and financial assets such as stocks and bonds.
Therefore, the subject matter can be commodities (such as gold, crude oil and agricultural products) or financial instruments.
The delivery date of futures can be one week later, one month later, three months later or even one year later.
A contract or agreement to buy or sell futures is called a futures contract. The place where futures are bought and sold is called the futures market. Investors can invest or speculate in futures.
Initial margin is the money that traders need to pay when they open new positions.
According to the transaction amount and the margin ratio, that is, initial margin = transaction amount * adjusted margin ratio. At present, the minimum margin ratio of China's futures margin system is 5% of the transaction amount, which is generally between 3% and 8% internationally.
When the book balance of the margin is lower than the maintenance margin, the trader must make up the margin within the specified time to make the margin account balance (settlement price x position x margin ratio), otherwise the exchange or institution has the right to carry out compulsory liquidation on the next trading day.
Settlement refers to the settlement of the trading gains and losses of both parties according to the settlement price announced by the futures exchange.
Delivery refers to the process that when the futures contract expires, according to the rules and procedures of the futures exchange, both parties to the transaction transfer the ownership of the goods contained in the futures contract and finally settle the contract at the end of the period.
main feature
1. The terms and conditions of a futures contract, such as commodity variety, trading unit, contract month, margin, quantity, quality, grade, delivery time and delivery place, are established and standardized, and the only variable is price. The standards of futures contracts are usually designed by futures exchanges and listed by national regulatory agencies.
2. The futures contract is concluded under the organization of the futures exchange and has legal effect, and the price is generated by public bidding in the trading hall of the exchange; Most foreign countries adopt public bidding, while our country adopts computer trading.
3. The performance of futures contracts is guaranteed by the exchange, and private transactions are not allowed.
4. Futures contracts can fulfill or terminate their contractual obligations through the settlement of spot or hedging transactions.