The so-called futures, as the name implies, are commodities to be delivered in a certain period in the future, but in fact they are standardized contracts that can be repeatedly transferred and bought and sold.

Second, what is futures trading?

Futures trading is a standardized contract trading method for buying and selling various commodities on the futures exchange based on margin.

Third, the economic function of futures trading.

Discover prices, avoid risks, and invest in tools.

Fourth, the purpose of futures trading.

Hedging or speculating for profit.

Verb (abbreviation of verb) the characteristics of futures trading

1. Commodity contractualization: Futures trading is the buying and selling of contracts. The two sides of the transaction do not rely on the spot, but through the established standardized contract, the physical objects do not directly enter and exit the futures market.

2. Contract standardization: Futures contracts are standardized contracts, and the only variable is price. Other factors such as quantity, quality, delivery time and place shall be uniformly stipulated by the exchange.

3. Capital leverage: Futures trading is conducted with a margin of 5- 10% as a guarantee, so it has a small and wide leverage.

4. Open trading: Futures trading is conducted publicly (on the exchange) by free bidding, not privately.

5. Documented delivery: Futures delivery is a process in which the seller delivers warehouse receipts and the buyer delivers payment vouchers, both of which are commercial bills recognized and protected by law.

Six, the operation mechanism of futures trading

1. Bidding system: The futures market is a standardized market, and transactions are conducted through open bidding according to the principle of "price first, time first and quantity first".

2. Margin system: Margin is a kind of financial guarantee for the settlement department of the futures exchange, which is divided into initial margin and additional margin. The initial deposit generally only accounts for 5- 10% of the total amount, which is generally consistent with the transaction risk to ensure the performance of the contract. The customer has a virtual loss and needs to pay an extra deposit.

3. Daily settlement system: futures trading should be made daily, and there is no debt system. That is, according to the daily transactions, liquidation, positions, profits and losses, the deposit is recovered in accordance with the regulations, thus ensuring the contract performance rate of 100%.

4. Hedging system: Hedging refers to trading in the same variety and quantity as the original transaction but in the opposite direction, thus ending the performance responsibility of the original contract. The process of hedging is essentially the process of changing hands.

5. Delivery system: The essence of delivery is to combine the futures market with the spot market. If the original contract is not hedged before the last trading day, the physical object must be delivered. The settlement system is adopted for delivery, and the delivery procedures are stipulated. The seller provides warehouse receipts and the buyer provides payment vouchers. Seller members can obtain warehouse receipts in the following ways: first, buy warehouse receipts at the designated warehouse designated by the exchange; The second is to send their own goods to the designated warehouse in advance, and issue warehouse receipts after acceptance; The third is to buy warehouse receipts at the exchange warehouse receipt auction.

6. Position restriction: refers to the restriction on the number of futures contracts bought and sold. In short, it is stipulated that "you can buy and sell as much money as you have."

7. Price range limit: that is, on the basis of the settlement price of the previous trading day, traders can only trade in this price range on that day.

7. Who can conduct futures trading?

Participants in futures trading can be divided into two categories, one is called hedgers and the other is called venture capitalists. Hedgers mainly use futures trading to transfer the risk of spot trading, thus achieving the purpose of reducing costs and stabilizing profits. When the time is good, they will also take physical commodity trading as the "backing" to make speculative profits. Venture capitalists mainly use futures trading, which is similar to stock and real estate investment, to pursue high profits.

The participants in hedging can be commodity producers, sellers, processors, importers and exporters, creditors and debtors from all walks of life.

Producer: Commodity production needs a cycle, during which price changes will affect the profits of producers. If you participate in futures trading during the production cycle, you can set the profit in advance. If you choose the right time, you can not only stabilize your profits, but also get an extra income.

Marketer: It takes a while for goods to be purchased and sold. Futures trading can not only choose the buying and selling opportunity flexibly, but also reduce the storage cost and preserve the value of inventory goods.

Processor: It takes time from the purchase of raw materials to actual use, and it takes time from the input of raw materials to the sales of finished products. No matter the adverse changes in the prices of raw materials or finished products, it will bring unnecessary losses. Therefore, wise processors need to participate in two types of hedging, namely, short-selling hedging of raw materials and short-selling hedging of finished products, which can not only hedge the purchased raw materials and finished products to be sold in the future, but also flexibly choose the timing of purchasing raw materials or selling finished products to reduce their inventory costs.

Importer and exporter: It takes some time from delivery to delivery. Generally, there will be currency exchange problems in payment, and adverse changes in price or exchange rate will bring unnecessary losses. Although many measures to avoid risks have been formulated in international trade, such as FOB and CIF. However, it is difficult for them to fully achieve their goals, and it takes time and energy to negotiate repeatedly. At the same time, participating in the hedging of commodities and foreign exchange can not only stabilize profits, but also save a lot of trouble.

Debtor and Debtor: Either creditor or debtor will suffer certain losses if the interest rate fluctuates during the period from lending to repayment. If there is currency exchange between borrowing and debt repayment, exchange rate fluctuations will also cause additional losses to one of them. In order to avoid these risks, the best choice is to participate in financial hedging.

There are many participants in venture capital. Anyone who has capital and wants to pursue a high rate of return can participate in the venture capital of futures trading, but those with strong strength can participate directly, and those with insufficient funds need to participate indirectly in a fund.

Participate in futures trading, you will find it more attractive than investing in real estate and stock industry, but at the same time remind you to be risk-conscious and make necessary preparations.