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Why is the sugar index in futures different from the main force of sugar?
The difference between sugar index and sugar main force can be explained from the following aspects: 1. Pricing mechanism: Sugar index is based on the weighted average of market transaction prices in a period of time, and it is the price index of the whole market. The price of the main sugar contract is determined by the most active futures contract in the market, and the price of the main sugar contract is more significantly affected by market trading activities. 2. Delivery specifications: The sugar index is not directly involved in delivery, but the main contract of sugar is a deliverable contract, and its price will be affected by delivery specifications and delivery conditions. Delivery specifications may cause the main contract price to be different from the index. 3. Trading activity and liquidity: The sugar index is based on the trading situation in the market for a period of time, and the price of the main sugar contract is determined by the price of the most active futures contract on the exchange. Changes in trading activities and liquidity may also lead to differences in the price and index of the main contract. In a word, the difference between sugar index and sugar main contract comes from the changes in its pricing mechanism, delivery specifications, trading activities and liquidity.