Hello, futures are the embryonic form of futures. It is a non-standardized contract, which is agreed by both parties. For example, I opened a tofu shop, and my soybeans (the raw material of tofu) are only enough for one month. I need to buy soybeans in January. I expected the price of soybeans to rise in the future, so I decided to solve it first, so I went to discuss with my aunt who sold soybeans on the street: I want to buy soybeans, but I can't put them in stock now. I will come in a month. Aunt is very happy to have business, but she thinks it is risky not to buy it after one month, or to buy it in another house, so she says, why don't we sign the bill first, you pay some money first, and we'll write this down? I was also worried that my aunt would go back on her word and signed the bill happily. A month later, I will make up the funds and complete the transaction. This is a forward transaction.

The picture comes from the internet.

There is no notary, the conditions are incomplete and the information is not equal. For example, I don't know the quality of soybean in the above example, so I gradually evolved into a formal contract, which is a futures contract. Futures contract refers to the standardized contract formulated by the futures exchange, which stipulates to deliver a certain quantity and quality of the subject matter at a specific time and place in the future.

According to the terms stipulated by the exchange, both parties are fair. Investors in need can purchase contracts directly on the exchange. The act of buying a contract is called opening a position. After buying, they can close their positions by physical delivery. In the above example, they can also sell the contract to get the difference. For example, after 1 month, my tofu shop closed down and this batch of soybeans was not needed, so I discussed with my boss to sell the opposite list. This is called hedging and closing futures.

At present, the market is mostly speculators, that is, hedging transactions.

If you don't know the basic knowledge of futures, you can also ask me. The low commission account opening process is private.