The method of hedging by enterprises in futures market 1. The main functions of the futures market
1. price discovery: the so-called price discovery refers to the use of open bidding and other trading systems in the market to form a market price that reflects the relationship between market supply and demand. Specifically, the market price can make an expected response to the future trend of the market, and together with the spot market, * * * makes an expectation.
2. Hedging (risk aversion): Hedging refers to trading activities in which the futures market is used as a place to transfer price risks, futures contracts are used as temporary substitutes for buying and selling commodities in the spot market in the future, and commodities are sold now and prepared, or the prices of commodities to be bought in the future are insured.
3. Speculative trading: gain trading profits.
Second, the definition of hedging
The above is the understanding of college party hedging. Let me talk about my opinion: enterprises can only buy and sell through the spot market, so after enterprises participate in the futures market, the whole business operation mode can be carried out in both futures and spot markets. Using futures to manage risks has virtually added a new management method to spot enterprises, and operational efficiency and profit rate will be guaranteed, many of which are now available. Increase some investment opportunities while managing risks for enterprises.
In short, the futures market is another virtual channel for you to buy and sell, through which you can manage inventory costs and hedge risks.
The basic characteristics of hedging: buying and selling the same commodity in the same quantity but in the opposite direction in the spot market and the futures market at the same time, that is, selling or buying the same quantity of futures in the futures market while buying or selling the spot. After a period of time, when price changes produce profits or losses in spot trading, losses in futures trading can be used to offset or compensate. Is that there? Now? With what? Period? Establish short-term and long-term hedging mechanisms to minimize price risks. The above can be understood as: managing risks, reducing costs and managing inventory.
Three. Classification and methods of hedging
Hedging of raw materials: The purpose of hedging raw materials is to control the cost within an acceptable range and lock in profits.
Product hedging: hedging the finished product and locking in the processing profit.
Exchange rate hedging: forex futures trading is used to ensure that the value of foreign currency assets or liabilities is not or less affected by exchange rate changes.
For example, our soybean processing enterprises usually purchase from the international market, and it may take 40 to 50 days to get from South America to North America. In fact, we have to buy futures at a low price in the CBOT market, which means that we usually buy futures. For example, if we start to purchase goods in June 65438+ 10, June 165438+ 10, or even June 165438+ 10, we may sell out. What we may buy now is the goods in March and May next year. Then product hedging is actually to preserve the value of processed products in the futures market, so soybean is the most typical. We hedge raw materials on CBOT and sell soybean oil and soybean meal on Dalian Commodity Exchange, so in fact, in this industrial chain, both raw materials and products are processed through the futures market, so the futures market provides a complete hedging product chain for everyone.
Exchange rate hedging: for example, the dollar against the euro and the dollar against the pound. I believe everyone still remembers the incident of Britain's withdrawal from the EU. If the multinational traders at that time did not hedge the exchange rate, would they suffer heavy losses? And the black swan incident in Switzerland. These are all lessons of blood. Although our RMB is not a freely convertible market, our currency swap market fluctuates greatly. We can greatly reduce the cost of Chinese enterprises by delaying the settlement of foreign exchange, thus restraining the continuous appreciation of RMB.
Modern enterprise hedging should comprehensively use futures and options to hedge risks. Many developed countries abroad, especially the four major grain merchants, have a lot to learn from. With the continuous listing of domestic commodity options, enterprises will have more choices.
Hedging way
Buy hedging: spot pre-sale+futures purchase
Sell hedging: spot purchase+futures sale
Comprehensive hedging: futures buy forward raw materials+futures sell forward products.
Give a chestnut: it is to buy hedging and sell hedging at the same time. Soybean juicer is a classic case. CBOT carries out hedging and hedging, and at the same time sells soybean oil and soybean meal on Dalian Commodity Exchange for hedging and price difference.
Fourth, hedging strategy.
There are three strategies: cost hedging, trend hedging and the combination of trend hedging and cost hedging.
Cost hedging: enterprises have clear costs and profits between spot and futures.
Trend hedging: it is necessary to consider the present, but also poetic and distant. Whether the trend in the next few months is a bull market or a bear market requires our relevant personnel to study the macro and fundamentals and make corresponding judgments. If the relationship between supply and demand changes greatly, corresponding countermeasures can be made to lock in the cost.
Summary: A successful hedging is a close combination of cost hedging and trend hedging, especially the judgment and grasp of the trend. So why say that R&D ability and operational ability are the foundation, and all hedging strategies and trend judgment should be closely combined.
Verb (abbreviation of verb) is the key to hedging success or failure.
Many corporate executives will say that this thing has its own leverage and risks, the futures market is risky, and the spot market is risky. Just like our real estate enterprises, the land paid a deposit, and then took down various loans to finance, and began to sell faster! Building materials and workers' wages are paid after the house is sold. Isn't this a lever? Is the risk less than that in the futures market? I don't think so! During the financial crisis in 2008, Lehman Brothers had a net asset of 38 billion, with a maximum management of 800 billion US dollars, and used 40 times leverage, while Goldman Sachs used 25 times leverage. The crisis came, Lehman went bankrupt and died of systemic risk after high leverage. Let me talk about the common risks of hedging, and we will try to avoid them!
There are mainly: trading that deviates from the main varieties, excessive trading, and disconnection between futures and spot (all of which are artificially controllable).
Take chestnut as an example: A factory is one of the largest production and export bases of lead and zinc in China. During the period of 1997, the specific managers engaged in zinc hedging in this factory exceeded their authority and failed to report the loss in time. As a result, zinc futures contracts continue to be thrown out in the London market, pegged by foreign financial institutions, and forced to close their positions, resulting in increasing losses.
When Zhuzhou Smelter finally reported a loss, 450,000 tons of zinc had been sold in London, when the total output of the plant was only 300,000 tons. Premier Zhu Rongji, who was shocked at home and abroad, came forward to transfer some zinc from other zinc factories for delivery, trying to reduce losses, but in the end, he had to buy the contract at a high price in order to fulfill the contract. In the six or seven months from 1997, the price of zinc in London increased by more than 50%, and the loss of centralized liquidation factories reached more than 1 100 million dollars in the last three days. This case tells us that excessive trading dies quickly, just like Man Cang's contrarian behavior, and most of them can't achieve great success. Hedging is not about buying whenever you want, but buying whenever you want!
Let's focus on the disconnect between futures and spot. This problem is very common in practical situations. Enterprises should set up hedging departments, recruit several traders and researchers, get a financial and risk control, and start hedging. It seems that my distribution is reasonable and I spent a lot of money. Why is it not effective? You do spot, do spot, thinking that futures have nothing to do with him; People who do futures do futures and think that the spot has nothing to do with him; It's just strange that this will work! Two people don't communicate with each other, each doing his own thing. Purchase, sales, inventory and hedging cannot correspond. What is the difference between this and speculation? Of course, there are many companies that make futures accounts for hedgers. They must make a profit, not lose money. Aren't you forcing him to speculate? If you really want to make money and manage your own assets well, we will find you an excellent investment and strategy. Isn't that enough? Therefore, hedging should be based on the profit and loss of the spot, rather than simply using the futures account as the evaluation standard.
When it comes to hedging, it has to be said that opening positions, spot buying inventory+futures long positions-signing sales contracts-futures selling positions, this is called exposure. How much exposure depends on the team's grasp of the trend. The futures market is another channel for us to purchase and sell, that is to say, if the futures market is long, it is your inventory; Short futures market is your sales.
The above are many reasons and cases of failure. Let's talk about the key to success, the rationality and judgment of the price difference between futures and spot, the turning point of bull and bear alternation, and the grasp of the rhythm of spot futures.
Can only continue to give a chestnut: there are generally three kinds of market trends, bull market, bear market, balanced market or shock market. In a bear market, it is good for a corn trader to earn 10 yuan to go to 20 yuan and earn 30 yuan. In a balanced city, corn traders may earn 50 yuan to 80 yuan if they operate well. In the bull market, if corn traders want to do well, a ton of corn can earn 200 yuan or even 300 yuan at most. In other words, corn is a chain from storage to processing. There are warehousing, trading and processors in this chain. In this bear market and equilibrium city, the whole value chain may have 200 yuan's profits. If it is distributed to vendors, it may be distributed to 30 to 50 yuan. However, in a bull market, this price chain goes from purchasing and storage to making feed and selling it to farmers, which may be 500 yuan to 800 yuan and 600 yuan or 700 yuan. Then the profit that traders can share at this time is 200 or 300 yuan. In other words, under different trends, this price profit is different. Why does everyone like bull market? Because every link in the bull market can make money, his whole value profit is very large, and the profit allocated to every link is very high.
Why do many companies lose money? His mind will always stay in a balanced city. In a bull market, you can earn at least 100 yuan from spot trading, so it is wrong to say that futures are higher than spot trading by 50 yuan, and you start to preserve the value. Therefore, it is necessary to make a reasonable evaluation of spot price difference, that is, spot price difference is different in bull market, bear market and equilibrium market.
Therefore, it is necessary to make a reasonable evaluation of the spot price differences of different trends, including coke, crude oil, copper and various metals, that is to say, in bear market, bull market and equilibrium city, their spot prices are different, and blind treatment will bring many problems.
The turning point of bull-bear alternation is also the turning point from balanced city to bull market and from balanced city to bear market. Simply put, it is a matter of exposure. The hedging ratio may be lower in a bull market and higher in a bear market. Maybe you will say that I didn't hedge the bull market, I didn't earn much, you earned more, but your risk is greater. If you make a mistake, it may bring disaster, and so does a bear market. In fact, every crisis is a reshuffle of enterprises. It is a good enterprise that merges those enterprises that are going to be eliminated, and it is also an opportunity to grow and develop. Natural selection, survival of the fittest
What are the types of futures? 1. Agricultural futures.
Cereals (wheat, corn, soybeans, etc.). ) is a bulk commodity and the earliest commodity that constitutes futures trading. Specifically, it can be divided into: grain futures, mainly including wheat futures, corn futures, soybean futures, soybean meal futures, red bean futures and rice futures.
Cash crop futures, such as raw sugar, coffee, cocoa, palm oil futures and rapeseed futures, can also be called? Soft goods? .
Livestock products futures mainly include meat products and fur products futures.
Forest products futures, mainly timber futures and natural rubber futures.
Types of futures II. Stock index futures
Stock index futures is a futures contract with stock index as the subject matter. It is a financial product with the shortest time to enter futures and the fastest development, and has become one of the most dynamic risk management tools in the international capital market. The essence of its trading is that investors transfer their expected risk of the whole stock market price index to the futures market through index futures tools, and its risk can be offset by the trading operations of investors who have different judgments on the stock market trend.
Types of futures. Nonferrous metal futures
Nonferrous metals are one of the more mature futures products in the world futures market. At present, there are about 10 kinds of metal futures listed and traded in the international futures market, namely copper, aluminum, lead, tin, nickel, palladium, platinum, gold and silver. The precious metal, industrial metal or non-precious metal futures included in it are not classified one by one.
Types of futures. Energy futures
It started from 1978 at the earliest, and it is a new commodity futures with extremely active trading volume, which has been showing a rapid growth trend. At present, its trading volume has surpassed metal futures, second only to agricultural products futures and interest rate futures, and it is an important part of the international futures market. At present, crude oil is the most important energy futures, among which the most important crude oil futures contracts are light and low sulfur crude oil on the New York Mercantile Exchange and Brent crude oil futures contract on the London International Petroleum Exchange.
Types of futures v. interest rate futures
Refers to futures contracts with bond securities as the subject matter, which can avoid the risk of securities price changes caused by bank interest rate fluctuations. Interest rate futures can be divided into short-term interest rate futures and long-term interest rate futures, and can be divided into short-term treasury bond futures, medium-and long-term treasury bond futures and Eurodollar time deposit futures according to debt certificates. This form of futures is mainly concentrated in the Chicago Board of Trade and the Chicago Mercantile Exchange.
Types of futures. Foreign exchange futures
Refers to the futures contract with the exchange rate as the subject matter, which is used to avoid exchange rate risks. It is also the earliest variety in financial futures. Its main trading varieties are: US dollar, British pound, Japanese yen, Swiss franc and so on. Worldwide, the main market for foreign exchange futures is the United States.