In 1970s, western countries began to experience stagflation and soaring prices, and the stock market was hit. The Dow Jones index fell from 1973 to 1974 in the stock market, with a drop of more than 50%. Western stock market investors began to be confused and didn't know what financial instruments to use.

From 65438 to 0977, Kansas City Futures Exchange submitted a report on stock index futures trading to the Commodity Futures Trading Commission of the United States. Once the stock index futures were introduced, they received extensive attention from the market, and the stock index futures were unprecedentedly prosperous. The success of stock index futures triggered a worldwide stock index futures trading boom.

With the fierceness of stock index futures trading, some witty investors began to make small moves in stock index futures trading and use long and short operation methods to create benefits for themselves. In the early days of stock index futures trading, using long and short trading methods can create huge profits for themselves.

In stock index futures trading, the positions held by investors after buying stock index futures contracts are called long positions. The position held after selling the stock index futures contract is called short position, referred to as short position. Investors holding long positions think that the price of stock index futures contracts will rise, so they will buy; Investors who hold short positions think that the price of stock index futures contracts will fall in the future, so they sell them.

For example, suppose that an investor opened a position 10 on October 5, 20 19, and bought 10 lots of Shanghai and Shenzhen 300 stock index futures, with a transaction price of 1400 points. At this time, he has a long position of 10. By the date of 65438+1October 17, the investor saw the futures price rising, so he sold six closed IF070 1 stock index futures contracts at the price of 14 15. After the transaction, the actual position of the investor is only four long positions.

When investors give orders for buying and selling, they must indicate whether to open or close positions. If an investor sells six open lots of IF070 1 stock index futures contracts when placing an order in June 5438+1October 65438+July, the actual position of the investor after the transaction is not the original four lots of long positions, but 10 long positions and six short positions.