Extended data:
1. Conversion of futures contracts, referred to as cash conversion. Spot-for-futures refers to the transaction that future positions is converted into a spot position after the long and short parties holding the same delivery month contract reach a spot trading agreement.
Second, futures contracts cannot be extended when they expire. It is necessary for individuals to close their positions. If it is unfair, the exchange will give it a strong level. If a legal person can send it, it will be sent, and if it is not sent, it will be strong. You need to sell the current period and buy the next period.
Futures contracts are the objects of futures trading. It is through buying and selling futures contracts on futures exchanges that participants in futures trading transfer price risks and get risk returns. Futures contracts are developed on the basis of spot contracts and spot forward contracts, but their most essential difference lies in the standardization of futures contract terms.
Futures contracts traded in the futures market are standardized in the quantity, quality grade, delivery grade, premium standard of substitutes, delivery place and delivery month, which makes futures contracts universal. In the futures contract, only the futures price is the only variable, which is generated by public bidding in the transaction.
The expiration time of futures contracts is the last trading day of futures, which refers to the deadline for futures contracts to stop trading. Every futures contract has a certain month limit. On a certain day in the contract month, the trading of the contract will be stopped and the physical delivery will be prepared.
Third, the futures contract conversion method:
The two parties who have reached an agreement jointly apply to the exchange, and after obtaining the approval of the exchange, the transaction will be closed at the closing price agreed by both parties (the spot buyer must hold long positions in the futures market, and the spot seller must hold short positions in the futures market). At the same time, according to the spot trading agreement reached, both parties conduct spot trading of the same type and quantity as the subject matter of the futures contract.
Futures trading is owned by Chicago Board of Trade (CBOT), Chicago Mercantile Exchange (CME), Minneapolis Grain Exchange (MGEX), the New York Mercantile Exchange (NYBOT) and the New York Mercantile Exchange (NYMEX). Long-term trading methods such as LIFFE and IPE.
In foreign countries, futures contract conversion is widely used not only in commodity futures trading, but also in financial instruments trading. Almost all kinds of futures and options on CME can be converted into cash.
Futures contract conversion process:
Looking for an opponent;
Negotiate the closing price and spot settlement price;
Apply to the exchange;
Exchange approval;
Go through the formalities;
Pay taxes.