The reason for short futures lies in the trading system of margin in futures. The so-called margin system refers to the system that investors only need to pay a certain percentage of margin when they open positions without paying funds according to the market value of futures.

However, when the market is unfavorable, the amount of loss cannot exceed the actual cost of investors' opening positions, so once the price fluctuation reaches or approaches the margin ratio, the exchange will force investors to close their positions.

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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 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.

The delivery date of futures can be one week later, one month later, three months later or even one year later.

A contract or agreement to buy or sell futures is called a futures contract. The place where futures are bought and sold is called the futures market. Investors can invest or speculate in futures.

To close/close/close an account

Refers to the settlement of the trading profits and losses of both parties according to the settlement price announced by the futures exchange.

transmit

It refers to the process that when a futures contract expires, according to the rules and procedures of the futures exchange, both parties to the transaction close the contract at the end of the period by transferring the ownership of the goods contained in the futures contract.

main feature

The commodity variety, trading unit, contract month, margin, quantity, quality, grade, delivery time and delivery place of futures contracts are all established and standardized, and the only variable is price. The standards of futures contracts are usually designed by futures exchanges and listed by national regulatory agencies.

Futures contracts are concluded under the organization of futures exchanges and have legal effect. Prices are generated through public bidding in the trading hall of the exchanges. Most foreign countries adopt public bidding, while our country adopts computer trading.

The performance of futures contracts is guaranteed by the exchange, and private transactions are not allowed.

Futures contracts can fulfill or cancel their contractual obligations through the settlement of spot or hedging transactions.