Futures is just a derivative tool. It can be enlarged through the margin system. The lower the margin ratio, the greater the leverage and the greater the risk. Give a concrete example:
The soybean margin ratio of Dalian Commodity Exchange is 5%. When a customer buys five soybean futures contracts (each 10 ton) at a price of 2,700 yuan/ton, he needs to pay an initial deposit of 6 750 yuan (i.e. 2700x50x5%%) to the exchange.
In the process of holding positions, traders will have floating profits and losses (the difference between settlement price and transaction price) due to the constant changes of market conditions, so the funds actually available in the margin account can be increased or decreased at any time. Floating profit will increase the balance of margin account, while floating loss will decrease the balance of margin account. Still according to the above example, suppose that on the third day after the customer bought 50 tons of soybeans at a price of 2700 yuan/ton, the settlement price of soybeans fell to 2600 yuan/ton. Due to the sharp drop in prices, the floating loss of customers is 5000 yuan (that is,
The failure of Cao Singapore Company to speculate in oil futures is a very painful lesson.
Option is also a derivative. Take the subscription of stock options as an example. The price of a stock is 20 yuan, and the corresponding call option may only be 2 yuan. Suppose the option will be exercised within one month, and the exercise price is 18 yuan. Then when the stock rises by 1 yuan, its warrant price will also rise by 1 yuan.
When you buy a stock with 20 yuan money, your income is only 1/20 = 5%, while when you buy 10 warrants with 20 yuan, your income is 10/20 = 50%. The income has been enlarged by 10 times. Similarly, when prices fall, your losses are quite heavy. If the price drops, 2 yuan, then the option in your hand is a piece of waste paper.
It was precisely because there was no speculative Nikkei that Bahrain Bank went bankrupt.
The leverage effect magnifies the risk of speculators. It has no effect on total capital.