Compared with stock trading, Shanghai and Shenzhen 300 stock index futures have the characteristics of two-way trading, high leverage, high liquidity and low transaction cost.
High liquidity: the investment of stocks or stock indexes is usually limited by the market value of tradable shares, but the two-way opening and T+0 trading mode make stock index futures speculation not limited.
Two-way trading: whether in a bull market or a bear market, you can achieve investment profit through stock index futures trading-long or short speculation strategy.
Low transaction cost: the handling fee of general futures trading is about a few thousandths of the contract value, while the cost of stock trading is about a few thousandths, so the transaction cost of futures is extremely low.
High leverage: At present, the exposure draft of Shanghai and Shenzhen 300 index futures contracts stipulates that the margin ratio is 12%, so the investment leverage is doubled. This kind of investment leverage has no capital cost. The only requirement is that a certain amount of cash flow must be reserved for additional margin on the premise that there is no debt settlement on that day.
Arbitrage strategy
The arbitrage of stock index futures mainly includes spot arbitrage, intertemporal arbitrage, maturity arbitrage, event arbitrage and cross-market or variety arbitrage.
Arbitrage is a market mechanism of risk transfer and price correction, which stems from the pricing failure between related targets. It can not only correct the market inefficiency caused by excessive speculation, but also lock in the expected annualized expected return without risk.