Futures trading concept

Futures trading is an organized trading method developed on the basis of spot trading and conducted by buying and selling standardized futures contracts on futures exchanges. .

In the futures market, most of the futures contracts bought and sold by traders are settled in the form of hedging before expiration. That is to say, people who buy futures contracts can sell the futures contracts before the contract expires; people who sell futures contracts can buy futures contracts before the contract expires to close their positions. Buying first and then selling or selling first and then buying are both allowed. Generally speaking, only a small part of futures transactions are physically delivered.

The object of futures trading is not the entity of the commodity (subject matter), but the standardized contract of the commodity (subject matter).

The purpose of futures trading is to transfer price risks or obtain risk profits.