1. The concept of futures
Futures is a financial derivative and a contract. At some point in the future, buyers and sellers buy and sell a commodity or currency at a specific price. The futures market is a global market, which involves the trading of stocks, commodities, currencies and other financial instruments.
2. Types of futures
There are two main types of futures: futures and options. Futures is a contract, and both buyers and sellers have the obligation to implement it according to the contract. Buyers and sellers must trade at a specified price at some time in the future, and an option is a contract in which the buyer has the right but the seller has no obligation. The buyer has the right but not necessarily to trade at the specified price.
3. Advantages of futures
The advantages of futures are mainly reflected in the following aspects:
(1) You can get higher returns by investing in futures, because the futures trading volume is large and the price fluctuates greatly, and investors can seize the opportunity to get higher returns.
(2) Futures can help investors control price fluctuations and reduce market risks, because futures contracts can lock in current prices and effectively avoid the risks brought by price fluctuations.
(3) Futures can provide investors with more investment strategies, and investors can choose the most suitable investment strategy according to their risk tolerance.
4. Futures risk
Futures investment will also bring certain risks:
(1) Market risk: Futures investors need to pay attention to the changes in the market, so as to adjust their investment strategies in time and deal with the risks brought by price fluctuations.
(2) Credit risk: Futures investors need to pay attention to the credit risk of their counterparties to ensure the smooth trading.
(3) Operational risk: Futures investors need to fully understand the market situation and be able to accurately judge the market trend to avoid losses caused by operational errors.
5. Futures investment strategy
Futures investment strategies mainly include the following:
(1) Arbitrage strategy: Arbitrage by using market price difference, and gain price difference income by buying at a low price and selling at a high price.
(2) Do more strategies: buy futures contracts in the expectation of rising prices to gain income.
(3) Short-selling strategy: selling futures contracts in the expectation of falling prices to obtain profits.
(4) Combination strategy: combining various futures contracts in order to obtain stable returns.
Conclusion: Futures is a kind of financial derivative, and buyers and sellers will trade at a specified price at some time in the future. Futures can be used for investment and risk management to help investors control price fluctuations and reduce market risks. Futures investment has certain risks, and investors need to fully understand the market situation and be able to accurately judge the market trend to avoid losses caused by operational errors. In addition, investors should choose the most suitable investment strategy according to their own risk tolerance, so as to obtain higher returns.
To sum up, futures is a financial derivative, which can be used for investment and risk management. It has the advantages of obtaining higher returns, controlling price fluctuations and providing investment strategies, but it also brings certain risks. Investors need to fully understand the market situation and be able to accurately judge the market trend to avoid losses caused by operational errors, and choose the most appropriate investment strategy according to their own risk tolerance to obtain higher returns.