Commodity futures refer to futures contracts with physical goods as the subject matter. Commodity futures have a long history and a wide variety, mainly including agricultural and sideline products, metal products and energy products. It is a standardized agreement about the buyers and sellers buying and selling a certain number of physical goods on an agreed date in the future at the price agreed at the time of signing the contract. Commodity futures trading is a standardized contract trading method for buying and selling specific commodities on futures exchanges.

What is the trading process of commodity futures?

1. The completion of futures trading is carried out through the organic connection of futures exchanges, clearing houses, brokerage companies and traders. 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.

2. The market representative trades 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.

3. 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.