Futures contracts are the promises of buyers and sellers. People who buy (sell) commodity contracts must buy (sell) linked assets (such as stocks, indexes, etc.). ) at a predetermined price on a specific date in the future. No matter how the price of linked assets changes in the future, investors must fulfill their responsibilities in futures contracts. Hang Seng Index futures contract (referred to as futures index) is a kind of derivatives, which allows investors to hedge the risk of stock decline by holding short positions (that is, selling contracts). In addition, investors can also hold "long positions" (that is, buy contracts) to make targeted investments in anticipation of a stock market rise. The use of futures to hedge risks aims to reduce the risks caused by price fluctuations in the relevant spot market. Suppose an investor holds a basket of Hang Seng Index stocks. If he sells an appropriate amount of futures index in the futures market, once the stock price falls, his stock in the spot market will lose money, but because he sells futures, the profit in the futures market can make up for the loss in the stock market.
2. What is the difference between small Hang Seng Index futures and existing Hang Seng Index futures?
Small Hang Seng Index futures (small futures index) and futures index are both futures contracts with Hang Seng Index as the target, and the difference between them lies in the cash value of each concept. The relative cash value of futures refers to 50 yuan, while the cash value of small futures refers to 10 yuan, and the margin level of small futures refers to one fifth of futures.
3. Because the contract value of short-term index is lower than that of futures index, the leverage ratio is relatively low?
Although the margin for investing in small futures index is only one-fifth of that of futures index, since both are based on Hang Seng Index, the volatility and leverage ratio are actually the same. For example, in September, the settlement price of short term refers to 12 and 163, and the contract value of short term refers to 12 and 630 yuan (12, 163x 10 yuan). Since the deposit is only $7,625, the leverage ratio has doubled. For futures contracts, the settlement price of September contract is also 12, 163, with a value of 608 150 yuan (12, 163x50 yuan). Calculated by the deposit of 38 125 yuan, the leverage ratio is also doubled. It can be seen that the leverage ratio of short-term index and futures index contract is the same.
Although the leverage effect of short-term index and futures index can bring huge profits, it may also lead to huge losses, even erode the deposit paid in a very short time, and even owe money to brokers. For example, if an investor buys a futures contract and fails to close the position on the same day, once it falls by more than 763 points after the market opens the next day, even if the securities firm closes the position (commonly known as "lightening the position"), the customer will bear the relevant losses. If the market fluctuates, as long as the Hang Seng Index falls by more than 153, the margin level of customers will fall below the level of maintaining margin, and brokers will usually immediately ask customers to pay more margin (commonly known as "covering positions" or "chasing up") and restore the margin level to the basic margin level (that is, the margin paid in the opening period). In case investors fail to pay in time, they are more likely to be cut before the market closes.