Essence of stock index futures
There is basically no essential difference between stock index futures and ordinary commodity futures except due delivery.
Suppose the current index of a stock market is 1000 points, that is, the current spot "price" of the market index is 1000 points, and now there is a "futures contract of the market index due at the end of February". If most investors in the market are bullish, the price of this index futures may have reached 1 100. If you think that the "price" of this index will exceed 1 100 by the end of 65438+February, you will buy this stock index futures, that is, you promise to buy this "market index" at the end of 1 100. When this index futures continues to rise to 1 150, you have two choices, either continue to hold the futures contract or sell the futures at the current new "price" (i.e. 1 150). At this time, you will close your position and get 50 points.
Of course, before the expiration of this index futures, its "price" may also fall, and you can continue to hold or close your position and cut your meat.
However, when the index futures expire, no one can continue to hold them, because at this time the futures have become "spot" and you must buy or sell the index at the promised "price". According to the difference between the "price" of the futures contract you hold and the current actual "price", refund more and make up less.
The role of stock index futures
The risks faced by investors in stock investment can be divided into two types: one is the systemic risk of the stock market, that is, all or most of the stock prices fluctuate.
Recommended reading: characteristics of stock index futures
The risk of moving; The other is individual stock risk, also known as non-systematic risk. Through portfolio, that is, buying a variety of stocks with different risks at the same time, we can avoid unsystematic risks well, but we can't effectively avoid systemic risks brought about by the decline of the whole stock market.
Since the 1970s, the volatility of stock markets in western countries has become more and more serious, and it is more and more urgent for investors to avoid systematic risks in the stock market. People began to try to convert the stock index into a tradable futures contract, and use it to hedge all stocks to avoid systemic risks, so stock index futures came into being.
The principle of using stock index futures to hedge is to do opposite operations in the stock market and stock index futures market according to the same trend of stock index and stock price changes to offset the risk of stock price changes.