So what exactly is futures speculation?
Generally speaking, futures speculation refers to the futures trading behavior in the futures market for the purpose of obtaining the spread income, which is a way for modern investors to make profits.
However, if futures speculators want to make a profit, they must use various methods to judge the trend of futures prices, so as to make a decision to buy or sell. If investors make wrong predictions when analyzing and forecasting the futures market, they will lose a lot in the end.
What are the ways of futures speculation?
Futures speculation mainly includes spread speculation and arbitrage speculation.
(1) The so-called spread speculation refers to the activities of speculators to buy when the expected price rises, sell when the price falls, and then sell or buy the original futures contract at a favorable opportunity to obtain profits. The key to spread speculation lies in the accuracy of analyzing and forecasting the price change trend of futures market. Because there are many factors that affect the price changes in the futures market, especially accidental factors such as speculative psychology, it is difficult to predict correctly, so the risk of such speculation is greater, so everyone should pay more attention!
(2) The so-called arbitrage speculation is a special way of futures speculation, which uses the relative price difference between different months, different markets and different commodities in the futures market to buy and sell different kinds of futures contracts at the same time to obtain profits.
Compared with spread speculation, generally speaking, arbitrage speculation is relatively simple and the risk is relatively small, but it requires investors to have rich investment experience and sufficient market experience. It judges the difference between the futures price and the spot price, and the price of the same commodity is different in different periods. At the same time, the price of the same commodity may be different in different exchanges at the same time. Of course, there are many situations that make arbitrage speculation possible.
The emergence of arbitrage speculation has greatly enriched the investment methods in the futures market. The futures market is not only restricted by contracts, but also conducive to the development of prices in a more reasonable direction.
What are the functions of futures speculation in the market?
Futures speculation is one of the elements of the futures market. With the development of the international futures market, speculation has become a recognized international practice in the futures market.
(1) Futures speculation bears the price risk. Futures speculators bear the risks that hedgers use to avoid and transfer in the market, which makes hedging possible.
(2) Futures speculation improves the original liquidity of the market. Investors frequently open positions in the futures market, hedge contracts and increase trading volume, which not only makes hedging transactions simple, but also reduces price fluctuations caused by traders entering and leaving the market.
(3) Futures speculation maintains the stability brought by the price system in the market. There is a certain correlation between the commodity prices in each futures market and the prices of different commodities. The participation of speculators, to a certain extent, promoted the price adjustment between the market and related commodities, improved the unreasonable price situation in different regions, improved the supply and demand structure in different periods, and commodity prices gradually became reasonable; It is also conducive to adjusting the price ratio of a commodity to related commodities, making it more rational, thus maintaining the stability of the market price system.
It seems that futures speculation does have its necessity and possibility. It is precisely because of the existence of futures speculation that hedging is possible and the futures market has such good liquidity. Moderate speculation is also conducive to the stability of market prices. It is biased to completely deny futures speculation, which is not conducive to the cultivation of China's futures market.