Stock index futures can buy and sell the underlying index according to the size of the stock price index determined in advance, and deliver it by cash settlement after maturity. As a type of futures trading, stock index futures trading has basically the same characteristics and processes as ordinary commodity futures trading. Stock index futures are a kind of futures, which can be roughly divided into two categories, commodity futures and financial futures. Stock index futures contracts use margin trading. Generally, a contract can be bought and sold only by paying about 10- 15% of the contract face value. On the one hand, it improves the profit space, but on the other hand, it also brings risks, which requires daily settlement of profits and losses. After buying a stock, the book profit and loss are not settled before selling. However, stock index futures are different. After the transaction, the contract held in hand should be settled at the settlement price every day, and the book profit can be withdrawn, but the book loss (that is, additional margin) must be made up before the opening of the next day. And because it is a margin transaction, the loss may even exceed your investment principal, which is different from stock trading.
Stock index futures contracts can be easily sold short and then repurchased after the price falls. It is ok to short stocks, but it is relatively difficult. Of course, once the price rises instead of falling after short selling, investors will face losses. Research shows that the liquidity of stock index futures market is obviously higher than that of stock spot market. For example, in 20 14, the trading volume of Shanghai and Shenzhen 300 stock index futures of China Financial Futures Exchange reached 163 trillion yuan, up by 16% year-on-year, while in 20 14, the trading volume of Shanghai and Shenzhen 300 stocks was 27.5 trillion yuan (about 37% of the total trading volume of Shanghai and Shenzhen stock markets). During the delivery of futures contracts, investors do not have to buy or sell the corresponding stocks to fulfill their contractual obligations, thus avoiding the phenomenon of "crowding" in the stock market during the delivery period.