What's the difference between commodities and futures?
The transaction objects of 1 are different.
Commodity trading refers to spot commodities or materialized commodity certificates, and futures refers to future futures contracts or option contracts, including financial instruments.
2 different regulatory agencies
The Ministry of Commerce is responsible for commodity trading, and the People's Bank of China is responsible for the financial supervision involved in commodity spot market trading and the supervision of payment business of non-financial institutions. The futures exchange was established with the approval of the State Council and supervised by the China Securities Regulatory Commission.
3 The margin ratio is different
For futures trading, you don't need to pay the full amount, you only need to pay a deposit of 5%- 10%. Commodity trading adopts a combination of performance bond and deposit, with the performance amount ranging from10% to100%, and the deposit must be paid at the time of delivery.
4 different groups of participants
Most of the traders involved in electronic trading of bulk commodities are spot production and processing enterprises, trade and distributors; Customers who participate in futures trading are mostly investors and speculators, as long as they have money.
5 the purpose of the transaction is different
The purpose of electronic trading of bulk commodities is to obtain or transfer the ownership of spot commodities; In futures trading, the purpose of hedgers is to avoid risks, the purpose of speculators is to obtain speculative profits, and the purpose of arbitrageurs is to obtain low-risk returns.
Six different price risks
Customers who participate in electronic trading of bulk commodities are mostly spot production and processing enterprises, traders and distributors. Therefore, the price of electronic trading varieties of bulk commodities is closer to the spot price, which is more instructive for spot enterprises. Most participants in futures trading are speculators, and their speculative atmosphere is very strong, so the prices of futures trading varieties often deviate seriously from the spot prices in the spot market.
7 different trading methods
Commodity trading prohibits centralized trading of standardized contracts. On the other hand, futures are conducted in a centralized way.
8 Different applicable normative documents
Normative documents applicable to bulk commodity trading mainly include Specification for Electronic Trading of Bulk Commodities, Special Provisions on Commodity Spot Market Trading (for Trial Implementation), Implementation Opinions of General Office of the State Council on Cleaning and Rectifying Various Trading Places, Decision of the State Council on Cleaning and Rectifying Various Trading Places to Effectively Prevent Financial Risks, Notice of CSRC, NDRC, Ministry of Industry and Information Technology, Ministry of Commerce and CBRC on Prohibiting Standardized Contract Trading in the Name of E-commerce, etc.
The above are some differences between commodities and futures, so you can pay attention to them.