It is a standardized contract (which can be understood as a contract) for futures commodities or financial products. For example, gold futures 1000g/ lot, gold ingots with quality and gold content above 99.95% (standardized contract). Other commodities, such as soybeans, corn and wheat, meet certain quality and quantity requirements, and then make a standardized contract. Futures trading is an interest in a trading contract.
What is the significance of the futures market?
Futures market first appeared in Europe. In ancient Greece and Rome, there was a central trading place, and bulk barter trading and futures trading activities all evolved from spot forward trading. The first modern futures exchange was established in Chicago, USA on 1848. The Chicago Board of Trade was founded by 82 grain traders.
The main purpose of establishing futures market is to reduce the default risk of spot forward trading. Because commodity prices are constantly changing according to comprehensive factors such as supply and demand and policies. When the supply exceeds demand, the price will be very high, and when the supply exceeds demand, the price will be very low, resulting in frequent defaults by buyers and sellers. These 82 grain merchants are research partners, so they can't do it. If the order is ordered here, there will be no buying or selling, and business will not be done. Therefore, the Chicago Stock Exchange was established. Both the buyer and the seller need to pay a deposit of 10% for trading, so that the default party's deposit will be paid to the other party, thus reducing the losses caused by default. After continuous improvement, the futures market has successively introduced interest rate futures, metals, energy, finance and other futures, introduced hedging and clearing mechanisms, increased the transactions of speculators, and enhanced the liquidity and vitality of the market.
The significance of modern futures market;
Save transaction costs, exchange transactions can reduce time costs, default costs and so on.
It is found that the futures price is the result of a large number of traders' transactions, which is open, transparent and authoritative. Futures prices are generally ahead of spot prices, which is of great help to the government's macro-control, organization, planning, operation and production.
Hedging helps enterprises to lock in operating costs and profits and avoid the risks brought by spot price fluctuations.
Asset allocation, investors and speculators can allocate futures as needed to realize asset appreciation and preservation.
How should ordinary people trade futures?
It's actually quite simple. "Buy low and sell high" is only four words. How low is the low point and how high is the high point. This is the direction we need to study as investors. There are two main aspects: fundamentals and technical aspects.
Fundamentals: Fundamentals is a very complicated system. There may be dozens of industrial chains in the upstream and downstream of a commodity, so it is very difficult to study it thoroughly. Domestic and international economic environment, domestic policies, weather and natural disasters, etc.
Technical aspects: There are also many technical aspects, such as K-line, moving average, MACD, KDJ, Bollinger Band and so on. It is estimated that there are dozens or hundreds on the market. If you don't use these farts in optics, you can't learn. Most people have only learned a little and haven't mastered the essence yet. It's not a question of which point to buy or which point to sell. You should know what he means. What matters is meaning. Only by understanding the meaning can we find a suitable trading method. The way to look at it is that you can't make money.
Make a trading plan: fundamentals and technology are not enough. Without a complete trading plan, 90% of the correct rate will be buried in the sea. No matter who it is, no one can defeat mankind. It's just a matter of time. This is what we need to do to prevent human nature from being magnified. Payment 1000 USD 10000 USD, 10000 USD and 10000 USD are different. Making a trading plan is the only effective way to prevent your mentality from getting worse, because you have thought of the worst. The trading scheme is also very general, and there are no clear and strict standards, such as fund management, take profit and stop loss, entry point, exit point, waiting, waiting, waiting (the third category includes entry point waiting, position waiting and empty position waiting). Waiting is also an investment. Investment is not only profit and loss, but also capital preservation. The process of short positions is 0% yield.
Analyze whether your character strengths is suitable for short-term, medium-term or long-term, and position yourself. Of course, you may also be a generalist, so make a good trading plan. Is this list short-term, medium-term or long-term? This is very important. People who lose money go from short-term to long-term or even long-term, and finally cut their meat and leave. Pain, pain, misfortune. Oh, what a pity!
Fundamentals and technicalities are skills. People with high skills may not be able to break the wind, but those who make good use of the general trend will certainly be able to ride the wind and waves.
Related Q&A: What does Futures 2206 mean? It is an independent figure of futures. Futures 2206 refers to the silver futures listed on the Shanghai Futures Exchange. Silver futures, that is, Shanghai Silver Futures, refers to the futures contract number with the silver price at a certain point in the future as the subject matter. Futures and spot are completely different. Spot is actually a tradable commodity. Futures are mainly not commodities, but standardized tradable contracts based on some popular products such as cotton, soybeans and oil and financial assets such as stocks and bonds. Therefore, the subject matter can be commodities (such as gold, crude oil and agricultural products) or financial instruments.