One: 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 with certain mass products such as cotton, soybeans and oil and financial assets such as stocks and bonds as the subject matter. Therefore, the subject matter can be commodities (such as gold, crude oil and agricultural products) or financial instruments.
Second, the futures market first sprouted in Europe. As early as ancient Greece and Rome, there were central trading places, bulk barter transactions, and trading activities with the nature of futures trade. The original futures trading was developed from spot forward trading. The first modern futures exchange 1848 was established in Chicago, USA, and 1865 established a standard contract model.
Three: Contract
1. The standardized contract formulated by the futures exchange stipulates that a certain quantity and quality of the subject matter shall be delivered at a specific time and place in the future.
2. Futures commission: equivalent to the commission in the stock. For stocks, the expenses of stock trading include stamp duty, commission and transfer fees. Relatively speaking, the cost of engaging in futures trading is only the handling fee. Futures commission refers to the fees paid by futures traders according to a certain proportion of the total contract value after the transaction.
Four: security deposit
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 in China is 5% of the transaction amount, which is generally between 3% and 8% internationally.
Verb (abbreviation of verb) When the book balance of margin is lower than the maintenance margin, the trader must replenish the margin within the specified time, so that the margin account balance is ≥ settlement price x position x margin ratio, otherwise the exchange or institution has the right to forcibly close the position on the next trading day. This part of the margin that needs to be replenished is called additional margin.
One of the biggest differences between futures trading and stock market is that futures can be traded in both directions, and futures can be long or short. When the price rises, you can buy low and sell high, and when the price falls, you can sell high and buy low. Going long can make money, and shorting can also make money, so there is no bear market in futures.