Futures, commonly known as futures contracts, refer to standardized contracts formulated by futures exchanges and agreed to deliver a certain number of subject matter at a specific time and place. This subject matter, also called the underlying asset, is the spot corresponding to the futures contract. This spot can be a commodity, such as copper or crude oil, a financial instrument, such as foreign exchange and bonds, or a financial indicator, such as three-month interbank offered rate or stock index. The broad concept of futures includes options contracts traded on exchanges. Most futures exchanges list both futures and options. The delivery date of futures can be one week later, one month later, three months later or even one year later. Investors can invest or speculate in futures. Improper speculation in futures, such as short selling stocks, will lead to financial market turmoil.

The meaning of spots

Spot refers to the physical objects that can be shipped, stored and manufactured, also known as physical objects. Spot refers to the goods that the seller pays for the goods immediately after the transaction is completed, or the buyer pays for the goods in a very short time. Spot is the symmetry of futures. In spot trading, the common trading method is cash on delivery or barter.

The difference between spot price and futures price

At present, many foreign countries directly price the spot after the futures price rises, but the domestic spot has not reached this state because of the insufficient development of futures, but it is basically certain that the spot has improved relatively because of the rising futures price, but the degree and frequency of improvement are less than that of futures. The existence of futures arbitrage also keeps the trend of futures spot consistent for a long time.

One of the relations between futures price and spot price, the origin of futures comes from spot investment demand. In the past, spot prices actually played a decisive role in futures prices because of the closed trading activities.

Due to the continuous development of futures trading, its trading scope has expanded to the whole world, and because futures trading is carried out through electronic bidding system, coupled with the participation of investors from all over the world, its price has been an all-round performance, so the current spot price positioning is obtained by multiplying the futures price by the percentage.

The second relationship between the futures price and the spot price, the role of futures itself is hedging, so since the futures price is all-round, that is to say, it reflects the change of supply in the market, the high futures price also shows that the demand in the forward market is in short supply, which will definitely cause the spot price to rise together. This is the primary content that investors need to know when learning futures knowledge.

However, the futures price and spot price are mutual, and the price deviation usually occurs in the process of trading, but with the approach of futures trading, its price will also change.