The essence of futures is to sign long-term contracts with others to buy and sell goods (or stock indexes, foreign exchange, interest rates) in order to achieve the purpose of maintaining value or making money.

How to speculate in futures?

If you think the futures price will go up, go long (buy and open positions), go up (sell) and close positions, and earn: price difference = close positions-open positions.

If you think the futures price will fall, short (sell the position), fall (buy) and close the position, and earn: price difference = opening price-closing price.

The following is for reference:

It is generally easy to understand how long futures are, but it is not easy to understand how short futures are. Let's take shorting wheat as an example (the seller may have no goods in hand when signing the selling contract) to explain the principle of futures shorting: when the price of wheat is 2000 yuan per ton, it is estimated that the price of wheat will fall. You signed a (first-hand) contract with the buyer in the futures market, for example, agreeing that you can sell him 10 ton of standard wheat at the price of 2000 yuan per ton. )

This is short selling (selling open positions). In practice, you are selling open wheat futures contracts.

Why should a buyer sign a contract with you? Because he's awesome.

When signing a contract, you don't necessarily have wheat in your hand (generally you don't really want to sell wheat). If you observe the market, the market drops to 1800 yuan per ton as you wish. You can buy100t wheat at the market price of 1800 yuan per ton and sell it to the buyer at the contract price of 2,000 yuan per ton. The contract has been completed.

(2000-1800) ×10 = 2000 (yuan)

In fact, people often hedge contracts (cancel contracts) by buying and closing positions, earning the same income as physical delivery, and avoiding complicated procedures and expenses in the process of physical delivery.

At this time, you only need 2000 yuan to sell a hand of wheat, 1800 to buy a flat, which is very convenient.

After the futures are opened, they can be closed at any time before the delivery date, or they can be bought and sold multiple times on the same day (generally, there is no handling fee for closing positions on the same day). 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 at the expiration), you will lose money, and the buyer who signed with you will make a profit.

If you close your position at 2200, you will lose money:

(2200-2000)× 10=2000 (yuan)+6 yuan handling fee.

The buyer (not specified) who signed the contract with you earned 2000 yuan (the handling fee was ignored).