1, price found

Because futures trading is an open contract transaction of forward delivery goods, a lot of market supply and demand information is concentrated in this market, and different people come from different places and have different understandings of all kinds of information, which leads to different views on forward prices through open bidding.

In fact, the process of futures trading is a comprehensive reflection of the change of supply and demand relationship and the expectation of price trend in a certain period of time in the future. This kind of price information has the characteristics of continuity, openness and anticipation, which is conducive to increasing market transparency and improving resource allocation efficiency.

2. Avoid risks

The emergence of futures trading provides a place and means for the spot market to avoid price risks. Its main principle is to use futures and spot markets for hedging transactions. In the actual production and operation process, in order to avoid rising costs or falling profits caused by changing commodity prices,

Futures trading can be used for hedging, that is, buying or selling futures contracts with the same quantity but opposite direction in the futures market, so that the gains and losses of futures and spot market transactions offset each other. Lock in the production cost or commodity sales price of the enterprise, maintain the established profit and avoid the price risk.

Step 3 hedge

When buying or selling a certain number of spot commodities in the spot market, selling or buying futures commodities (futures contracts) of the same variety and quantity in the opposite direction in the futures market will make up for the losses in another market with the profits in one market to avoid price risks.

Extended data

Futures trading risk

1, leverage risk

The capital amplification function magnifies both income and risk. Therefore, how to use the lever of 10 times and how much to use it will also vary from person to person. A higher level can use more than five times or even enough leverage. If those with lower levels also use high leverage, it will undoubtedly make the risk out of control.

2. Strong peace and explosion

Exchanges and futures brokerage companies have to settle accounts every trading day. When the investor's margin is insufficient and below the specified proportion, the futures company will forcibly close the position. Sometimes, if the market is extreme, there will even be short positions, that is, all the funds in the account are lost, and even the futures company needs to pay the part whose losses exceed the account margin.

3. Delivery risk

Ordinary investors do not want to buy more soybeans in a few months, nor do they want to sell copper in a few months. If the contract is held until the delivery date, investors need to collect enough funds or goods for delivery (the payment is about 10 times of the deposit).

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