In futures trading, internal market and external market are two commonly used terms to describe different futures trading markets. The internal market usually refers to the domestic futures market and the external market refers to the international futures market. There are some differences between the inner disk and the outer disk, which will be explained in detail in this article.
2. The characteristics of the inner market The inner market refers to the futures market traded in China, also known as the domestic futures market. Internal transactions are regulated by domestic laws and regulations, including agricultural products, industrial products and financial derivatives. On-site trading takes RMB as the settlement currency, and the trading time is generally from 9 am to 3 pm.
The internal market is characterized by relatively small transaction scale and low liquidity. Due to domestic supervision, the participants in the internal market are mainly domestic institutional investors and individual investors. The transaction cost is low, but there are relatively few types of transactions that can be carried out.
3. Characteristics of the external market The external market refers to the futures market traded internationally, also known as the international futures market. Foreign transactions usually use foreign currencies such as US dollars as the settlement currency, and the transaction time spans different countries and time zones. The varieties of external market transactions are more diversified, including metals, energy, foreign exchange and stock indexes.
The external market is characterized by large transaction scale and high liquidity. Participants in the external market come from all over the world, including institutional investors, individual investors and traders. Compared with the internal market, the external market is more international, and the transaction volume and variety are more abundant.
4. The connection between the inner disk and the outer disk Although the inner disk and the outer disk are two different futures markets, there is a certain connection and interaction between them. The price and trading volume of the domestic futures market are influenced by the external market, especially the international futures prices related to the same variety.
The connection between the inner disk and the outer disk is also reflected in the arbitrage transaction. Arbitrage trading refers to the trading strategy of obtaining profits by buying and selling between different markets. For example, buy a commodity futures contract in the international futures market, and then sell the same commodity futures contract in the domestic futures market to make a profit through the price difference.
5. How to choose internal transaction or external transaction depends on personal investment demand and risk preference. Internal transactions may be more attractive to investors who are more familiar with the domestic economy and market, while external transactions provide broader trading opportunities and higher liquidity.
If you have a deeper understanding of the international market and want to conduct more diversified transactions, the external market may be more suitable for you. External transactions may face higher transaction costs and more complicated legal and regulatory requirements.
When choosing internal or external transactions, investors should fully understand the characteristics and risks of the market and make decisions according to their own investment experience and ability.
Futures internal market and external market are terms to describe different futures trading markets. The internal market mainly refers to the domestic futures market, and the external market refers to the international futures market. They are different in market size, liquidity, trading varieties and participants. Investors can choose to participate in internal or external transactions according to their own needs and risk preferences.