Futures implement a margin mechanism, trading the standard contract of the commodity rather than the commodity itself. Therefore, only a certain margin is needed in futures, and goods can be bought and sold directly as needed.
Short selling is the operation of selling commodity contracts directly when the expected commodity prices fall.
Because we are selling commodity contracts for delivery at a specific time in the future, we only need to fulfill the contracts before the expiration date, and there is no need to have corresponding contracts when selling.
Means of performance are divided into hedging and delivery. Hedging refers to buying equal contracts to close positions, and delivery refers to taking out qualified physical objects.
Futures, whose English name is futures, is completely different from spot. Spot is actually a tradable commodity. Futures are mainly not commodities, but standardized tradable contracts based on some popular products such as cotton, soybeans and oil and financial assets such as stocks and bonds. Therefore, the subject matter can be commodities (such as gold, crude oil and agricultural products) or financial instruments.
The delivery date of futures can be one week later, one month later, three months later or even one year later.
A contract or agreement to buy or sell futures is called a futures contract. The place where futures are bought and sold is called the futures market. Investors can invest or speculate in futures.
main feature
The commodity variety, trading unit, contract month, margin, quantity, quality, grade, delivery time and delivery place of futures contracts are all established and standardized, and the only variable is price. The standards of futures contracts are usually designed by futures exchanges and listed by national regulatory agencies.
Futures contracts are concluded under the organization of futures exchanges and have legal effect. Prices are generated through public bidding in the trading hall of the exchanges. Most foreign countries adopt public bidding, while our country adopts computer trading.
The performance of futures contracts is guaranteed by the exchange, and private transactions are not allowed.
Futures contracts can fulfill or cancel their contractual obligations through the settlement of spot or hedging transactions.
condition
Minimum fluctuation price: refers to the minimum fluctuation range of the unit price of futures contracts.
Maximum fluctuation limit of daily price: (also known as price limit) means that the trading price of futures contracts shall not be higher or lower than the prescribed price limit within a trading day, and the quotation exceeding this price limit will be deemed invalid and cannot be traded.
Delivery month of futures contract: refers to the delivery month stipulated in the contract.
Last trading day: refers to the last trading day when a futures contract is traded in the contract delivery month.
Futures contract trading unit "hand": Futures trading must be carried out in an integer multiple of "hand", and the number of commodities contracted in each hand of different trading varieties should be specified in the futures contract of that variety.