Author: foreign exchange hero

What is barter?

The so-called futures trading refers to the trading behavior of buyers and sellers buying and selling futures contracts on the futures exchange. Futures trading is a new trading method developed by trading in the futures exchange on the basis of spot trading and standardized futures contracts. This transaction follows the principle of "openness, fairness and justice". Buying futures is called "short selling" or "long trading", that is, long trading, while selling futures is called "short selling" or "short selling", that is, short trading. Buying and selling futures trading is also called establishing trading positions in futures market, short selling is called establishing long positions, and short selling is called establishing short positions. The trading behavior of starting to buy or sell futures contracts is called "opening a position" or "establishing a trading position", the trader holding the contract is called "holding a position", and the trader closing a position for reverse trading is called "closing a position" or "hedging". If the contract in the hands of the trader has not been hedged by the delivery month, the short contract holder should be prepared for physical delivery, and the long contract holder should be prepared to accept physical funds. Under normal circumstances, most contracts are settled by hedging before expiration, and only a few need physical delivery.

Release date: 2006-2- 12 1:20:04

Global solution for online foreign exchange trading! QQ group of foreign exchange speculation: 1 122844

Author: foreign exchange hero editor delete reference to the second floor

Special function of early delivery

Futures trading is based on spot trading and is the development of general contract trading. In order to promote the circulation of futures, a special commodity, and ensure the smooth and healthy development of futures trading, all transactions are conducted in an organized futures market. Therefore, futures trading has the following basic characteristics.

(1) contract standardization-futures trading is characterized by standardization and simplification. Futures trading is conducted by buying and selling futures contracts, which are standardized contracts. This standardization means that the grade, quantity and quality of commodities traded in futures are pre-specified, and only the price changes. This is an important feature that distinguishes futures trading from spot forward trading. The standardization of futures contracts greatly simplifies the transaction procedures, reduces the transaction costs, and minimizes the disputes and disputes arising from different understandings of contract terms between the two parties.

(2) Fixed place-futures trading has the characteristics of organization and standardization. Futures trading is conducted in a legally established futures exchange, and OTC trading is generally not allowed, so futures trading is highly organized. A futures exchange is a place where buyers and sellers get together for futures trading. It is a non-profit organization, which aims to provide places and trading facilities for futures trading, formulate trading rules and act as the organizer of trading. It does not interfere with futures trading activities or the formation of futures prices.

(3) Unified settlement-futures trading is characterized by the same payment direction. Futures trading is specifically settled by the clearing house. All transactions reached in the exchange must be sent to the clearing house for settlement, and only after settlement can they be finally reached and become legal transactions. The two parties to the transaction have nothing to do with each other. They only take the clearing house as the counterparty and are only responsible for the clearing house financially, that is, in the direction of payment, they are only responsible for the clearing house, not the mutual exchanges between the two parties. This consistency of payment direction greatly simplifies the trading procedure and the physical delivery procedure, and also creates the possibility for traders to evade the due delivery obligation by "hedging" before the futures contract expires.

(4) Fixed delivery-physical delivery only accounts for a certain proportion, most of which is hedging. The "hedging" mechanism of futures trading exempts traders from the responsibility of physical delivery. The operating experience of foreign mature futures markets shows that because the cost of physical delivery in futures markets is often higher than that of direct spot trading, most traders, including hedgers, hedge their positions, and only a small part of them finally make physical delivery. Futures delivery must be carried out in the designated delivery warehouse.

(5) Brokerage of trading-futures trading is characterized by centralization and high efficiency. This centralization means that futures trading is not directly conducted by buyers and sellers who actually need to buy and sell futures contracts on the exchange, but by floor brokers, that is, representatives who leave the market on behalf of all buyers and sellers on the futures exchange. Traders trade by giving orders, and all trading orders are finally executed by the on-site representative. The transaction is simple, it is very easy to find the transaction object, and the transaction efficiency is high, showing the characteristics of high efficiency. Concentration is also manifested in the fact that off-site private transactions are generally not allowed.

(6) institutionalized margin-futures trading is characterized by high credit, which is concentrated in the margin system of futures trading. Futures trading needs to pay a certain margin. Before entering the futures market to start trading, traders must pay a certain performance bond in accordance with the relevant regulations of the exchange, and maintain the minimum level of deposit during the trading process in order to provide guarantee for the futures contracts they buy and sell. The implementation of the margin system not only makes the futures trading have the leverage principle of "small and broad" and absorbs the participation of many traders, but also enables the clearing house to provide performance guarantee for the transactions reached and settled by the exchange to ensure that traders can perform their duties.

(7) Commodity specialization-futures trading is selective for futures commodities, and futures commodities are special. Many commodities suitable for spot trading are not necessarily suitable for futures trading. This is the selective feature of futures trading to futures commodities. Generally speaking, whether commodities can be traded in futures depends on four conditions:

First, whether there is price risk, that is, whether the price fluctuates frequently;

Second, whether the owners and demanders of commodities are eager for hedging protection;

Third, whether the goods can withstand storage and transportation;

Fourth, whether the grades, specifications and quality of commodities are easy to distinguish. Different levels need to be upgraded.

These are the four most basic conditions, and only commodities that meet these conditions can be traded as futures commodities.

Release date: 2006-2-121:20: 21

Author: foreign exchange hero editor delete reference to the third floor

Difference between delivery of forward goods and cash goods

There are similarities between futures trading and spot trading, such as both trading methods, real buying and selling, involving the transfer of commodity ownership and so on. The differences are as follows:

(1) The direct target of buying and selling is different.

The direct object of spot trading is the commodity itself, including samples, objects and pricing. The direct object of futures trading is futures contracts, not how many contracts to buy or sell.

(2) The purpose of the transaction is different.

Spot transaction is the transaction of primary currency and primary commodities, and physical delivery and payment settlement are carried out immediately or within a certain period of time. The purpose of futures trading is not to obtain physical objects at maturity, but to avoid price risks or make profits through hedging.

(3) Different trading methods.

Spot transactions are generally one-on-one negotiations to sign a contract, and the specific content is agreed by both parties. If the contract cannot be fulfilled after signing, it will be resorted to law. Futures trading is conducted in an open and fair manner. One-on-one negotiation (or private hedging) is considered illegal.

(4) Different trading places.

Spot transactions are generally decentralized. For example, grain and oil, daily industrial products and means of production are all managed by some trading companies, manufacturers and consumers in a decentralized manner. Only some fresh and individual agricultural and sideline products are concentrated in the form of wholesale markets. However, futures trading must be conducted in an open and centralized manner in the exchange according to law, and cannot be traded over the counter.

(5) The security system is different.

Spot trading is protected by contract law and other laws. If the contract is not honored, it will be destroyed by law or arbitration. In addition to national laws, industry and exchange rules, futures trading mainly depends on the margin system to ensure maturity.

(6) The range of goods is different.

The varieties of spot trading are all commodities in circulation, while the varieties of futures trading are limited. Mainly agricultural products, petroleum, metal commodities and some primary raw materials and financial products.

(7) Different settlement methods.

Spot trading is cash on delivery, no matter how long it takes, it is a settlement or several settlements. Due to the implementation of the margin system in futures trading, profits and losses must be settled daily, and the system of marking the market day by day is implemented. The settlement price is calculated according to the transaction price, and the settlement price of CZCE is the weighted average price of all futures contracts of the same variety on that day. The settlement price has the following functions:

(1) Basis for calculating liquidation profit and loss and position profit and loss;

(2) The basis for deciding whether to add the deposit;

(3) Basis for determining the amount of suspension on the next trading day.

Date of posting: February 2006-12 1: 20: 38

Author: foreign exchange hero editor delete reference 4th floor

Forward delivery, convenient flow and practical affairs

I. Basic operating procedures of futures trading

The completion of futures trading is carried out through the organic connection of futures exchanges, clearing houses, brokerage companies and traders. First, the customer chooses a futures brokerage company and goes through the account opening formalities in this brokerage company. When the agency relationship between the customer and the brokerage company is formally established, they can issue trading instructions to the brokerage company according to their own requirements. After receiving the trading instructions from customers, the brokerage company shall immediately notify the company's representative in the exchange, write down the contents of the instructions and hand them over to the company's acquiring department. The market representative conducts the transaction according to the customer's instructions. At present, computer automatic matching is widely used in China. The settlement institution shall notify the brokerage company in writing after daily settlement. Brokerage companies also provide customers with settlement lists. If the customer asks to close the position, the process is the same as before. Finally, the market representative hedges (liquidates) the original position contract, and the brokerage company sends the liquidation statement to the customer. If customers don't close their positions, they will implement a daily mark-to-market system. When the book profit is settled at the settlement price of the day, the brokerage firm will pay the profit difference to the customer. If there is a book loss, the customer must make up the difference. The actual profit and loss can only be settled after the customer closes the position.

Second, enter the futures market.

(a) to choose a brokerage company, a good brokerage company should meet the following conditions:

1, with abundant funds and good reputation.

2. The communication tools are fast and advanced, and the service quality is good.

3, can take the initiative to provide customers with all kinds of detailed market information.

4. Proactively introduce favorable trading opportunities to customers, be honest, reliable and cautious, and have a good business image.

5. Collect reasonable performance bond.

6. Provide reasonable and preferential commission.

7. Be able to provide customers with capable, ethical and responsible brokers.

(2) Opening an account

1. Customer conditions require customers to meet at least the following conditions:

(1) has full capacity for civil conduct;

(2) Having its own funds or other property suitable for futures trading, and being able to bear the risks of futures trading.

(3) Having a fixed residence;

(4) Comply with the relevant provisions of the state and industry.

2. Specific procedures for opening an account

(1) The customer provides relevant documents and supporting materials.

(2) Issuing risk disclosure and futures trading rules to customers, explaining the risks of futures trading and the basic rules of futures trading. On the basis of an accurate understanding of the risk disclosure and futures trading rules, customers should sign and seal the risk disclosure.

(3) The futures brokerage institution and the customer jointly sign the client entrustment contract, clarify the rights and obligations of both parties, and formally form the entrustment relationship.

(4) A futures brokerage institution shall provide customers with a special account for futures trading funds, which shall be separated from its own fund account. The customer must have a full deposit in the account before placing an order.

(3) preparation for entering the market

Before entering the market, customers should also do some preparatory work:

1, psychological preparation. Futures prices fluctuate all the time, the correct judgment is naturally profit, and the wrong judgment is naturally loss. Therefore, it is very necessary to make psychological preparations for profit and loss before entering the market.

2. Mental preparation. Futures traders should master the basic knowledge and skills of futures trading (there are two main analytical methods of futures trading:

(1). Basic analysis method: analyze the basic factors that affect the relationship between supply and demand of commodities, such as the country's economic policy, economic environment, the situation of substitutes and even climate, and judge the possible price trend accordingly.

(2) Technical analysis: According to the historical data of futures prices reflected in the chart, the future price trend is predicted through inductive analysis. ), analyze futures trading, formulate appropriate strategies, understand the trading rules of the commodities involved in the trading, and issue trading instructions correctly, so as to make yourself a winner in the futures market.

3. Preparation of market information. In the futures market which is completely determined by the law of supply and demand, information is extremely important. Whoever can grasp the market information timely, accurately and comprehensively will win in the highly competitive futures trading.

4. Draft a trading plan. In order to control the loss to the minimum and increase the profit, it is necessary to trade in moderation, and to draw up a trading plan before entering the market as a code of conduct for participating in trading.

Three. Business process of futures trading

After the customer has initially accepted the futures theory, and is familiar with and mastered the basic futures trading instructions and operation skills, they will enter the actual trading process.

(A) the formation of futures prices

There are two main ways to form futures prices: oral public bidding and computer matching.

1, oral public bidding.

There are two kinds of oral public bidding methods: continuous bidding system (dynamic disk) and single price system (static disk).

2. Computer matching transactions

Computer matchmaking transaction is a kind of transaction method designed according to the principle of oral open bidding. Compared with oral public bidding, this trading method has the characteristics of accuracy and continuity. At present, China's futures trading adopts computer matching trading system.

Computer futures trading process

The transaction process includes the following steps:

1. Instruction issuing methods include face-to-face entrustment, written entrustment and telephone entrustment.

2. People have the right and obligation to review the customer's instructions, including whether the margin level is sufficient, whether the instructions exceed the validity period and whether the instructions are complete, so as to determine the validity and invalidity of the instructions.

3. After receiving the trading order, the trading order center of the brokerage firm stamps the trading order and checks whether there are any omissions in the trading order, and then quickly transmits it to the brokerage market representative of the exchange by telephone.

4. After receiving the instruction, the representative of the brokerage company will input the instruction into the computer as quickly as possible.

5. The command center will record the feedback transaction result on the transaction form, stamp it with time stamp, and feed it back to the customer according to the original process.

6. In principle, the final confirmation of each customer transaction is subject to the final confirmation of the settlement company or the settlement department of the exchange.

7. Every transaction of the customer is recorded and filed by the brokerage company, and the retention period is generally not less than 5 years.

8. The brokerage company will charge a certain commission for every transaction (sale) made by customers.

Release date: 2006-2- 12 1:20:59

Author: foreign exchange hero editor deleted the 5th floor reference.

The role of barter in the commodity age

The basic function of commodity futures trading is to find prices and avoid price risks.

(1) Discovery price:

There are many participants in futures trading, all trading at the price they think is the most suitable. Therefore, futures prices can comprehensively reflect the expectations of both supply and demand for the relationship between supply and demand and price trends in a certain period of time in the future. This kind of price information increases the transparency of the market and helps to improve the efficiency of resource allocation.

(2) Avoiding market risks:

In the actual production and operation process, in order to avoid rising costs or falling profits caused by changing commodity prices, futures trading can be used for hedging, that is, buying or selling the same amount of goods in opposite directions in the futures market, so that the gains and losses in the two markets can offset each other.

Futures is also an investment tool. Because the futures contract price fluctuates, traders can use the price difference to earn risk profits.

Release date: 2006-2-121:21:09

Author: foreign exchange hero editor delete reference to the 6th floor

Basic principle and application of hedging

First, the basic principles of hedging

1, hedging concept

Hedging refers to the trading activities in which the futures market is used as a place to transfer the price risk, and the futures contract is used as a temporary substitute for buying and selling commodities in the spot market in the future, so as to insure the prices of commodities to be bought in the future.

2. The basic characteristics of hedging

The basic practice of hedging is to buy and sell the same commodity in the same quantity but in the opposite direction in both the spot market and the futures market, that is, to buy or sell the same quantity of futures in the futures market at the same time. After a period of time, when the price changes make the profit and loss in spot trading even, the losses in futures trading can be offset or compensated. Therefore, hedging mechanisms are established between "now" and "period" and between short-term and long-term to minimize price risk.

3. The logical principle of hedging.

Hedging can preserve the value because the main difference between futures and spot of the same specific commodity lies in the different delivery dates, and their prices are influenced and restricted by the same economic and non-economic factors. Moreover, the futures contract must be delivered in kind when it expires, so the spot price and the futures price also have convergence, that is, when the futures contract approaches the expiration date, the difference between the two prices is close to zero, otherwise there will be opportunities for arbitrage. So before the maturity date, there will be arbitrage. In two related markets, the reverse operation will inevitably produce the effect of mutual cancellation.

Second, the method of hedging

1. Sales hedging of producers

As a provider of social goods, both farmers who provide agricultural and sideline products to the market and enterprises that provide basic raw materials such as copper, tin, lead and oil to the market can adopt the transaction mode of selling hedging to reduce the price risk, that is, selling the same amount of futures as the seller in the futures market to ensure the reasonable economic profits of the goods they have produced or are still selling to the market in the future, so as to prevent the price from falling and suffering losses when they are officially sold.

2. The operator sells the hedging.

For the operator, the market risk he faces is that when the goods are not resold after being acquired, the price of the goods will fall, thus reducing his operating profit and even causing losses. In order to avoid this market risk, operators can use the method of selling hedging to carry out price insurance.

3. The overall hedging of processors.

For processors, market risks come from buyers and sellers. He is worried about rising raw material prices and falling finished product prices, and even more afraid of rising raw material and finished product prices. As long as the materials and finished products that the processor needs can be traded in the futures market, he can use the futures market for comprehensive hedging, that is, buying the purchased raw materials and selling the products, which can relieve his worries and lock in his processing profits, thus specializing in processing and production.

Third, the role of hedging.

Enterprise is the cell of social economy. What, how much and how to produce and operate with their own or mastered resources are not only directly related to the production economic benefits of the enterprise itself, but also to the rational allocation of social resources and the improvement of social economic benefits. The key to the correctness of enterprise's production and management decision lies in whether it can correctly grasp the market supply and demand state, especially whether it can correctly grasp the next changing trend of the market. The establishment of the futures market not only enables enterprises to obtain the supply and demand information of the future market through the futures market, but also improves the scientific rationality of the enterprise's production and operation decision-making, and truly determines the production on demand. It also provides a place for enterprises to avoid market price risks through hedging, which plays an important role in improving the economic benefits of enterprises.

Fourth, hedging strategy.

In order to better achieve the purpose of hedging, enterprises must pay attention to the following procedures and strategies when conducting hedging transactions.

(1) Adhere to the principle of "equality and relative". "Equality" means that the commodities traded in futures must be the same as those traded in the spot market in terms of types or related quantities. "Relative" refers to the opposite buying and selling behavior in two markets, such as buying in the spot market, selling in the futures market, or vice versa.

(2) Spot transactions with certain risks should be selected for hedging. If the market price is relatively stable, there is no need to hedge, and the hedging transaction needs a certain fee.

(3) Compare the net risk amount with the hedging cost, and finally determine whether to hedge.

(4) According to the short-term price trend forecast, calculate the expected change of basis (that is, the difference between spot price and futures price), and make the timing plan for entering and leaving the futures market accordingly, and implement it.

Release date: 2006-2-121:21:22

Author: foreign exchange hero editor deleted the 7th floor reference.

Mechanism and operation of futures investment and hedging income

The reason why hedgers want to trade futures is to transfer the price risk faced by normal business activities. So, who will take the risk? This is another participant in futures trading-venture capitalists, that is, speculators. Speculators' trading behavior in the futures market includes speculation and hedging to obtain profits, which constitutes another important business in futures trading.

First, the basic concept and function of speculation

(A) the concept of futures speculation

Buying and selling standardized futures contracts in the futures market purely for profit is called futures speculation. Its basic method is to speculate by using the price fluctuation of a certain variety, which can be divided into short-selling speculation and short-selling speculation.

(B) the function of futures speculation

Speculation is an indispensable part of the futures market, and its economic functions mainly include the following points:

1, bear the price risk. Futures speculators bear the risks that hedgers try to avoid and transfer, which makes hedging possible.

2. Improve market liquidity. Speculators frequently open positions and hedge their contracts, which increases the trading volume in the futures market, which not only makes hedging transactions easy to clinch, but also reduces the price fluctuations that traders may cause when entering and leaving the market.

3. Keep the price system stable. Commodity prices in various futures markets are highly correlated with the prices of different commodities. The participation of speculators promotes the price adjustment of related markets and related commodities, which is conducive to improving the unreasonable price situation in different regions, improving the supply and demand structure of commodities in different periods, and making commodity prices more reasonable; It is also conducive to adjusting the price ratio of a commodity to related commodities, making it more rational, thus maintaining the stability of the price system.

4. Form a reasonable price level. Speculators buy futures at a low price, increase demand and lead to price increase, and sell futures at a higher price level, reducing demand, thus stabilizing prices and stabilizing price fluctuations, thus forming a reasonable price level.

(3) Precautions for speculative trading: master futures knowledge, choose commodities, fully understand contracts, and be familiar with trading rules; Determine the profit target and maximum loss limit; Ensure the amount of venture capital; Stop loss to ensure the existence and increase of profits.

Second, the definition of hedging profit

Hedging profit refers to the trading behavior that futures market participants use the price difference between different months, different markets and different commodities to buy and sell two different types of futures contracts at the same time to obtain risk profits from them. It is a special way of futures speculation, which enriches and develops the content of futures speculation, making futures speculation not only limited to the horizontal change of the absolute price of futures contracts, but also turned to the horizontal change of the relative price of futures contracts. Usually called arbitrage, etc.

Three. Types of hedge profits

(1) Intertemporal arbitrage: Intertemporal arbitrage is one of the most commonly used hedging profit transactions, which is divided into bull spread, bear market arbitrage and butterfly arbitrage in practice.

(2) Cross-market arbitrage: arbitrage by using the price difference of the same variety in different futures markets;

(3) Cross-commodity arbitrage;

(4) Raw material-commodity arbitrage.

Attached:

What is futures trading?

Futures trading is an organized trading method developed on the basis of spot trading and conducted by buying and selling standardized futures contracts on futures exchanges. Futures trading is the natural result of the development of trade forms. Historically, with the production and exchange of human society, commodity currency exchange relations and various forms of trade activities have emerged. Generally speaking, trade activities can be divided into two categories: spot trade and futures trade.

In the futures market, most futures contracts bought and sold by traders are closed in the form of hedging before expiration. In other words, people who buy futures contracts can sell them before the contract expires; People who sell futures contracts can buy futures contracts to close their positions before the contract expires. It is allowed to buy before selling or sell before buying. Generally speaking, physical delivery in futures trading is only a small part.

The object of futures trading is not the entity (subject matter) of commodities, but the standardized contract (subject matter) of commodities. The purpose of futures trading is to transfer price risk or gain risk profit.

What is futures trading?

Futures trading is an organized trading method developed on the basis of spot trading and conducted by buying and selling standardized futures contracts on futures exchanges. Futures trading is the natural result of the development of trade forms. Historically, with the production and exchange of human society, commodity currency exchange relations and various forms of trade activities have emerged. Generally speaking, trade activities can be divided into two categories: spot trade and futures trade.

In the futures market, most futures contracts bought and sold by traders are closed in the form of hedging before expiration. In other words, people who buy futures contracts can sell them before the contract expires; People who sell futures contracts can buy futures contracts to close their positions before the contract expires. It is allowed to buy before selling or sell before buying. Generally speaking, physical delivery in futures trading is only a small part.

The object of futures trading is not the entity (subject matter) of commodities, but the standardized contract (subject matter) of commodities. The purpose of futures trading is to transfer price risk or gain risk profit.