Futures, commonly known as futures contracts, are standardized contracts made by futures exchanges, which stipulate to deliver a certain number of subject matter at a specific time and place in the future. This subject matter, also called basic assets, can be a commodity, such as copper or crude oil; It can also be financial assets, such as foreign exchange or bonds; It can also be a financial indicator, such as the three-month interbank offered rate or the stock index.
Futures are developed on the basis of forward trading. Forward trading means that buyers and sellers negotiate the price first, and then trade at this price at some time in the future. For example, farmers negotiated with grain processors and sold 50 tons of rice to grain processors at the price of 3 yuan/Jin three months later. This is a forward transaction.
Futures trading is also a kind of futures trading activity, but it is very different from forward trading. First of all, futures trading is a standardized contract transaction conducted on the futures exchange, which is conducted openly. The terms of each futures contract are standardized. For example, if the maturity date is set to 15 or the last trading day of each month, the underlying assets are electrolytic copper or five-year treasury bonds of a certain specification, and a contract transaction is equivalent to the transaction of five tons of copper or treasury bonds with a face value of 100,000 yuan. There is no such provision for forward trading.
Secondly, the object of futures trading is futures contracts, not physical objects. Therefore, futures investors can make physical delivery or cash delivery when the contract expires. As far as physical delivery is concerned, one party pays cash and the other party hands over the goods of the specified specifications agreed in the contract, which is the same as the forward transaction; The difference is that futures contracts can be closed before the contract expires to reverse the original transaction. Therefore, futures trading is more liquid.
Finally, and most importantly, futures trading is carried out on the same day as the margin system and the debt-free settlement system, so its default risk is much lower than that of forward trading.
What is the stock price index?
Stock price index is an index used to reflect the overall level and changes of various stock market prices in the whole market. In the stock market, hundreds of stocks are traded at the same time, and the fluctuation of stock price is different. Therefore, it is necessary to have a common standard, namely the stock price index, to measure the price level of the whole market and observe the changes in the stock market.
The stock price index is generally compiled by some influential institutions and released regularly and timely. Famous indexes in the international market include Dow Jones Industrial Average, Standard & Poor's 500 Index and London Financial Times Index.
What is stock index futures?
The so-called stock index futures is a standardized futures contract based on a certain stock index. Buyers and sellers trade the stock index price level after a certain period of time. After the contract expires, the stock index futures will be delivered in the form of cash settlement.
There are many obvious differences between stock index futures trading and stock trading:
(1) The stock index futures contract has an expiration date and cannot be held indefinitely. Under normal circumstances, the stock can be held all the time after buying, but the stock index futures contract has a clear expiration date. Therefore, trading stock index futures must pay attention to the contract expiration date to decide whether to close the position in advance or wait for the contract expiration for cash delivery.
(2) Stock index futures trading adopts margin system, that is, when trading stock value futures, investors do not need to pay the full contract value, but only need to pay a certain proportion of funds as performance guarantee; At present, China's stock trading needs to pay the full value of the stock. Because stock index futures are margin trading, the loss may even exceed the investment principal, which is different from stock trading.
(3) In the direction of trading, stock index futures trading can be short, can be bought before selling, or can be sold before buying, so stock index futures trading is a two-way transaction. However, in some countries, there is no short selling mechanism in the stock market, and stocks can only be bought first and then sold, and short selling is not allowed. At this time, stock trading is a one-way transaction.
(4) In terms of settlement method, the stock index futures trading adopts the debt-free settlement system on the same day, and the exchange settles the trading margin on the same day. If the account margin is insufficient, it must be replenished within the specified time, otherwise it may be forced to close the position; However, stock trading adopts full amount trading, which does not require investors to add funds, and does not settle the book profit and loss after buying the stock but before selling it.
How did stock index futures develop?
In 1970s, western countries experienced economic stagflation, slow economic growth, soaring prices and political turmoil. The stock market experienced the worst crisis after World War II, and the Dow Jones index fell more than 50% in the stock market decline of 1973- 1974. People realize that there is no suitable financial instrument to use in the face of the stock market decline.
From 65438 to 0977, KCBT submitted a report on stock index futures trading to CFTC.
Although CFTC attaches great importance to this report, due to the differences between the US Securities and Exchange Commission (SEC) and CFTC on who will supervise stock index futures, it is impossible to make a decision. 198 1 year, Johnson, the new chairman of CFTC, and Friedrich Hirth, the new chairman of the US Securities and Exchange Commission, reached the "Friedrich Hirth-Johnson Agreement", clearly stipulating that the jurisdiction of stock index futures contracts belongs to CFTC. 1982 the us congress passed the agreement. In February of the same year, CFTC approved KCBT's report. On February 24th, KCBT launched the first stock index futures contract-the value line index contract. On April 2 1 day, Chicago Mercantile Exchange (CME) launched S&: PS00 stock index futures; Later, NYBOT also quickly launched the new york Stock Exchange composite index futures trading.
Stock index futures have been widely concerned by the market since its birth. The value line index futures sold 350,000 pieces in S&, and the turnover of S & ampP500 index futures reached 6.5438+0.5 million. From 65438 to 0984, the trading volume of stock index futures has accounted for more than 20% of all futures contracts in the United States.
The success of stock index futures not only greatly expanded the scale of the domestic futures market in the United States, but also triggered a worldwide stock index futures trading boom. Not only some foreign exchanges that have opened futures trading have followed suit, but also some countries and regions that have never conducted futures trading often take stock index futures as a breakthrough.
What are the characteristics of stock index futures?
Stock index futures have at least the following characteristics:
(1) intertemporal. Stock index futures is a contract in which both parties agree to trade at a certain time in the future under certain conditions by predicting the changing trend of stock index. Therefore, the trading of stock index futures is based on the expectation of the future, and the accuracy of the expectation directly determines the profit and loss of investors.
(2) lever. Stock index futures trading does not need to pay the contract value in full, but only needs to pay a certain percentage of margin to sign a contract with greater value. For example, suppose the margin for stock index futures trading is 10%, and investors only need to pay 10% of the contract value to trade. In this way, investors can control the investment of 10 times of contract assets. Of course, while the income may increase exponentially, the losses that investors may bear are also multiplied.
(3) linkage. The price of stock index futures is closely related to the change of its basic asset-stock index. Stock index is the basic asset of stock index futures, which has a great influence on the price changes of stock index futures. At the same time, stock index futures are the expectation of future prices, so they also play a guiding role in stock indexes.
(4) High risk and risk diversity. The leverage of stock index futures determines that it is more risky than the stock market. In addition, there are certain market risks, operational risks and cash flow risks in stock index futures.
What are the main functions of stock index futures?
The main functions of stock index futures include the following three aspects:
(1) risk avoidance function
The risk aversion of stock index futures is realized by hedging, and investors can avoid risks by operating in the opposite direction in the stock market and stock index futures market. The risk of stock market can be divided into two parts: unsystematic risk and systemic risk. Nonsystematic risks can usually be minimized by diversification, while systemic risks are difficult to avoid by diversification. Stock index futures have a short-selling mechanism. The introduction of stock index futures provides the market with a tool to hedge risks. Investors who are worried about the stock market decline can hedge the systemic risk of the overall stock market decline by selling stock index futures contracts, which is conducive to reducing the impact of collective selling on the stock market.
(2) Price discovery function
Stock index futures have the function of discovering prices. Through the open and efficient bidding of many investors in the futures market, it is conducive to the formation of stock prices that can better reflect the true value of stocks. The futures market has the function of discovering prices. On the one hand, there are many participants in stock index futures trading, and the price formation contains price expectation information from all parties. On the other hand, stock index futures have the advantages of low transaction cost, high leverage ratio and fast instruction execution. After receiving new market information, investors are more inclined to adjust their positions in the futures market, which also makes the stock index futures price respond to the information faster.
(3) Asset allocation function
Stock index futures trading is widely used as a means of asset allocation by institutional investors because of the low transaction cost brought by the margin system. For example, an institutional investor who mainly invests in bonds thinks that the stock market may rise sharply in the near future and intends to seize this investment opportunity. However, due to the strict proportion restrictions on the varieties other than investment bonds, it is impossible to invest most of the funds in the stock market. At this time, institutional investors can buy stock index futures with a small amount of funds, so as to obtain the average income of stock market rise and improve the overall allocation efficiency of funds.