The essence of futures is to sign a forward contract for buying and selling commodities (or stock indexes, foreign exchange, interest rates) with others to achieve the purpose of preserving value or making money.

It is generally easy to understand long futures trading, but not so easy to understand short selling. Let's take shorting wheat as an example to explain the principle of shorting futures:

When wheat is 2,000 yuan per ton, you estimate that the price of wheat will fall, and you sign a (one-lot) contract with the buyer in the futures market. Contract, (for example) stipulates that within half a year, you can sell him 10 tons of standard wheat at any time at a price of 2,000 yuan per ton. (The value is 2,000 × 10 = 20,000 yuan. Calculated based on a 10% deposit, you should provide 2,000 yuan for performance of the contract. The deposit and performance bond will change with the change of the contract value)

Why should the buyer sign a contract with you? Because he is bullish.

When you sign the contract, you do not have it in your hand. There must be wheat (usually you don’t really want to sell wheat). You are observing the market. If the market goes down as you wish, and falls to 1,800 yuan per ton, you buy 10 tons of wheat at 1,800 yuan per ton. 2,000 yuan per ton was sold to the buyer, and the contract was fulfilled (your performance deposit was returned to you). You earned:

(2000-1800)×10=2,000 (yuan) (the handling fee is normal 10 yuan round trip, ignore)

The buyer (not specific) who signed the contract with you lost 2,000 yuan (the handling fee is ignored).

In actual operation, you only need to sell one lot of wheat at 2000 points and buy evenly at 1800 points, which is very convenient.

If the price of wheat rises within half a year, You have no chance to buy low-priced wheat to close your position. You will be forced to buy high-priced wheat to close your position (the contract must be closed when it expires). You will lose money, and the buyer who signed the contract with you will make a profit.

If you close the position at 2200 points, you will lose:

(2200-2000)×10=2000 (yuan) + 10 yuan handling fee.

< p>The buyer (non-specific) who signed the contract with you earned 2,000 yuan (the handling fee is ignored).