What is futures?
From: Ideal Forum (55 188.com) by Cai Kangqiao
Other functions of the futures market.
(1) price discovery: that is, investing through the open real-time quotation system in the futures market.
The public can quickly know the expected price information of future spot.
(2) Speculation function: Spot holders can participate in risks they don't want to take.
Speculators in the futures market bear this burden.
2. The role of speculators in the futures market
Without the participation of speculators in the futures market, spot holders cannot hedge.
It is impossible to produce a futures market with sound supply and demand sides.
3. Types of futures
(1) Commodity futures, agricultural products futures (cotton), metal futures (gold) and energy futures (crude oil).
(2) Financial instrument futures, interest rate futures (government bonds, commercial promissory notes, etc.). ), stock index futures (Singapore A50, IF, IC, IH index futures, etc. ) and foreign currency futures.
(3) Futures trading units
Futures contracts usually have standard contract specifications formulated by futures exchanges to facilitate trading.
A transaction contract unit is usually called "a contract".
(4) Futures contract specifications
Contract size, quotation and commodity grade.
(deliverable level), expiration month, minimum quotation unit, daily price limit, delivery method, deposit, etc.
4. Using the principle of futures hedging
Futures prices and spot prices have similar trends.
(1) Establish reverse positions of buying and selling in both spot and futures markets.
(2) The loss of asset value caused by unfavorable price changes can be offset by the positive income generated by the other party.