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Principles and methods of futures analysis
Convergence principle, convergence principle

The two economic principles of engaging in futures business are convergence principle and convergence principle. The principle of convergence means that the futures price trend and spot price trend of the same commodity tend to be consistent or basically consistent. The convergence principle means that when the futures contract approaches the due delivery, under the action of arbitrage trading, the futures price and spot price gradually converge and tend to be consistent.

It can be seen from the two principles that successful futures varieties and futures markets must be conducive to the realization of hedging, futures prices of trading varieties must be positively related to spot prices, and trading rules and delivery rules must be conducive to physical delivery and arbitrage.