Futures algorithm

Position funds: total funds * (x%-y%);

Single maximum allowable loss of total assets * z %；;

First-hand opening price: (current price * trading unit * deposit)+handling fee;

Default number of lots (maximum opening position): holding money/first-hand opening price;

Maximum stop loss point of each transaction: maximum allowable loss/number of positions opened/trading unit/minimum price change;

The value of a price fluctuation of futures varieties: minimum fluctuation price * trading unit * number of positions opened;

There are generally two ways to close futures trading positions (namely, closing positions). One is hedging liquidation; The second is physical delivery. Physical delivery is to fulfill the responsibility of futures trading through physical delivery. Therefore, futures delivery refers to the behavior of buyers and sellers of futures trading to make physical delivery when their open contracts expire according to the regulations of the exchange, and end their futures trading. Physical delivery accounts for a small proportion of the total futures contracts. However, it is the existence of the physical delivery mechanism that makes the futures price change synchronous with the related spot price change, and gradually approaches with the approaching of the contract expiration date. As far as its nature is concerned, physical delivery is a kind of spot trading behavior, but physical delivery in futures trading is the continuation of futures trading, which is at the junction of futures market and spot market and is the bridge and link between futures market and spot market. Therefore, the physical delivery in futures trading is the basis of the existence of the futures market and the fundamental premise for the two major economic functions of the futures market to play.

The two functions of futures trading provide a stage and foundation for the application of the two trading modes in the futures market. The function of price discovery requires the participation of many speculators, which concentrates a lot of market information and abundant liquidity. The existence of hedging transactions provides tools and means for avoiding risks. At the same time, futures is also an investment tool. Due to the fluctuation of futures contract prices, traders can make use of arbitrage to earn risk profits through contract spreads.

Futures trading can preserve the value because the spot price of a specific commodity is influenced and restricted by the same economic factors, and the price changes of the two are generally in the same direction. Due to the existence of the delivery mechanism, the spot price of futures contracts converges near the delivery period.