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What are the advantages of financial futures?
1。 Higher mobility. The standardization and efficient trading process of futures contracts have greatly enhanced the liquidity of the futures market. In many market situations, the liquidity of the futures market far exceeds that of the spot market. 2。 Low risk liquidation. The unique liquidation procedure in the futures market can effectively avoid the default risk of counterparties, and allow trading in the opposite direction to the existing future positions. 3。 Fight big with small. The futures trading margin system enables futures contract holders to control larger positions with smaller capital, and risk-averse people can reduce their risks with smaller costs, so that there will be no physical trading of basic assets; Speculators can take advantage of market price fluctuations to make profits without investing huge amounts of cash or exceeding the credit limit. 4。 The transaction cost is low. An important purpose of futures trading is to minimize transaction costs. In general, the performance cost of futures contracts is only a small part of the equivalent transaction amount in the OTC market.