This position cost generally refers to the cost of holding the spot, including the storage, handling, damage, depreciation, insurance and other costs of the spot, as well as the capital cost occupied by the spot.

This is different from the overnight fee for precious metals trading, and it is a real cost, not just a handling fee.

In this way, it is very simple. The longer the holding time, the longer the capital takes up, the higher the cost, the higher the storage cost and other expenses, and the higher the overall cost. Or conversely, from Dallas to the auditorium to the delivery month, this part of the cost will naturally drop to zero, because the goods are sent to the delivery warehouse and the money is back. There is only one occupation cost in financial futures, and the principle is analogy.

Futures trading is based on spot trading. Since there is an actual position in the spot, it must be reflected in the contract price.

In addition, simply saying that holding the contract does not hold the spot is a simple occupation cost. Suppose you hold a 1 year forward contract. If you have a lot of money, you should consider the interest rate of the money. The longer you hold it, the greater your interest rate loss. If the contract is not profitable, it is actually a loss. ...