Maybe some white people will worry that their futures will explode when they are in contact with futures, but in fact, the explosion is conditional. The following is what Bian Xiao brought to you when futures are about to break out, hoping to help you to some extent.
When will futures break out?
There is no fixed rule for the time when futures trading is interrupted, and it may happen at any time, depending on market conditions and investors' trading behavior. The following are some situations that may lead to short futures:
Sudden events: Sudden economic, political or natural disasters may lead to drastic market fluctuations. If investors fail to respond in time and take appropriate risk measures, there may be short positions.
Violent market fluctuation: A sharp price fluctuation may trigger a stop loss order quickly, resulting in multiple positions being closed, thus leading to short positions.
Leverage magnifies losses: Futures trading usually adopts a higher leverage ratio. Although leverage can bring higher income potential, it also increases risks accordingly. When the market fluctuation is unfavorable to investors, leverage will amplify losses, leading to an increase in the risk of short positions.
Unreasonable risk management: if investors do not establish effective risk management strategies, such as setting reasonable stop loss points and controlling the size of positions, they may not be able to effectively control losses and eventually lead to short positions.
Operational error or emotional influence: investors may make wrong operational decisions during trading, such as intraday trading, chasing up and down, etc., due to emotional fluctuations or blindly following the trend, thus increasing the risk of short positions.
It should be noted that investors should pay close attention to avoiding short positions. In order to avoid the risk of short positions as much as possible, investors should have good trading discipline, establish scientific and effective risk management strategies, and ensure that they have sufficient funds and risk tolerance for futures trading. In addition, regular monitoring of market dynamics, strict implementation of stop-loss strategy and accumulation of trading experience are also important ways to reduce the risk of short positions.
How long does it take for investors to explode under the leverage of 100 times?
Under the leverage of 100 times, when the subject matter purchased by investors rises by 1%, the yield of long investors reaches 100%, and the loss of short investors is 100%, that is, short positions appear; When the subject matter purchased by investors falls by 1%, short investors will gain 100% under the leverage of100 times, while long investors will lose 100%, that is, short positions. Therefore, when the leverage of futures is 100 times, when it falls 1%, (up 1%) makes long positions.
Therefore, in the process of futures trading, investors should make rational use of their leverage, operate lightly, try to ensure that they have enough margin, and set up a stop-loss and profit-taking position after making orders.
Difference between spot market and futures market
Simply put, it is to buy and sell physical objects in the spot and futures contracts in the futures market. Therefore, the difference between spot market and futures market is as follows:
1, the transaction method is different: in short, both the buyer and the seller think that the transaction can be concluded. But the purpose of the futures market is not to get the real thing, but to worry about the future rise or fall of the spot, so hedging or arbitrage can be carried out.
2. trading places is different: the futures trading market is flexible and changeable, which is not affected by the trading time and place, and can be traded at any place. However, futures can only be traded on futures exchanges, and futures trading must be conducted in an open and centralized manner according to law. China Commodity Futures Exchange is owned by Dalian Commodity Futures Exchange and Zhengzhou Commodity Exchange.
3. Different guarantee methods: spot transactions are protected by contract law, but the futures market implements the margin system. If you don't exercise your rights according to the contract at maturity, you will lose the deposit.
Will the spot futures explode?
Spot trading also has leverage, and when the margin is insufficient, the system will burst the position if it is forced to close the position.
Short positions generally appear in extreme markets, and the higher the leverage, the greater the probability of short positions, and the lower the leverage, the lower the probability of short positions.
For example, under the leverage of 100 times, when the subject matter purchased by investors rises by 1%, the yield of long investors reaches 100%, and the loss of short investors is 100%, that is, short positions appear; If its leverage is 50 times, when the subject matter purchased by investors rises by 2%, the yield of long investors will reach 100%, and the loss of short investors will reach 100%, that is, there will be short positions.
Therefore, in the process of futures trading, investors should make rational use of their leverage, operate lightly, try to ensure that they have enough margin, and set up a stop-loss and profit-taking position after making orders.
What was the cause of the explosion?
1, like heavy operation. Heavy position operation means that investors use excessive leverage ratio to open positions. Due to the implementation of the margin system in futures trading, investors only need to pay a certain proportion of the contract value as a margin to trade. This will amplify investors' income, but it will also amplify risks. If the market fluctuates violently, investors do not stop loss or add margin in time, which will easily lead to the risk of short margin.
2. No timely stop loss. Stop loss refers to setting a predetermined price level after opening a position, and automatically closing the position when the price reaches this level to avoid the loss from expanding. However, many investors didn't set a stop loss or didn't want to stop loss for their own reasons, so they were lucky and took the loss, which led to more and more losses and eventually broke the position.
3. Adjustment of margin ratio. Margin adjustment refers to the futures exchange raising or lowering the margin ratio according to market conditions and risk management needs. When the margin ratio is raised, investors need to increase the corresponding funds to maintain their original positions. If investors fail to add margin in time, it may lead to insufficient margin and the risk of short positions.