What does contract grid neutrality mean?
When the strategy is started, it is higher than the market price and lower than the market price. Contract grid neutrality refers to the establishment of long and short positions on derivatives such as futures or options on the basis of the market neutrality principle of neutral grid strategy, in order to hedge market risks and obtain relatively stable returns. The opening and closing operations of this strategy usually follow certain principles, one of which is that the opening/closing of the strategy is higher than the market price and lower than the market price. The advantage of neutral grid strategy is that it can effectively hedge market risks and obtain relatively stable returns. At the same time, this strategy can also get better returns when the market price fluctuates little. However, this strategy also has some risks, for example, if the market price fluctuates greatly, it may lead to losses. Therefore, before the operation of neutral power grid strategy, it is necessary to conduct sufficient market research and risk assessment.