The functions of each component are as follows:
(1) Futures Exchange. Modern futures trading is conducted in futures exchanges. A futures exchange is a place approved by government departments to buy and sell futures contracts, a specially organized and fixed commodity exchange, and a place where specific commodities are traded by specific personnel at a specified time and place in accordance with the specified articles of association.
Futures contracts must be listed and traded on the exchange, which is the premise for futures contracts to take effect. Futures trading or through the open outcry system in the trading pool of the exchange; Or use the electronic trading system, in the trading hall. No matter which way is adopted, the exchange plays an important role in ensuring that buyers and sellers perform the contract.
(2) commission merchants. The main function of a commission merchant is to act as a trading intermediary in the futures market. Specifically, the agency business of futures dealers mainly includes: ① executing customer trading instructions and acting as an agent for physical delivery; (2) Keeping and handling customer deposits; ③ Record the profit and loss of customers; (4) Provide customers with commodity quotation, market analysis, trading decision information and related consulting services by using advanced facilities and technologies.
(3) the clearing house. Futures trading enters the liquidation procedure after contract hedging or delivery. All transactions completed in the exchange must be sent to the clearing house for settlement. Both parties in futures trading only take the clearing house as the counterparty, and only assume financial responsibility for the clearing house, that is, in the direction of payment, they only pay the clearing house, but not each other. This consistency of payment direction greatly simplifies the trading and delivery procedures, and also creates the possibility for traders to hedge before the futures contract expires. The existence of clearing houses makes futures contracts really separate from forward contracts, which has some characteristics of financial markets. In addition, the clearing house will ensure the performance of each contract, be responsible for matching buyers and sellers, arrange and supervise futures delivery, handle the accounts of defaulters and provide relief to victims. A completely independent clearing house company does not need the guidance and intervention of the exchange, which realizes the separation of trading and settlement. This balance of interests can effectively avoid collusion and fraud.
(4) futures traders. Any person or enterprise who conducts commodity futures trading on a futures exchange through a broker and abides by the trading rules is a futures trader. According to the purpose of participating in trading, it can be divided into speculators and hedgers.