As far as speculation is concerned: long is expected to rise in the market outlook, so I buy contracts and sell them at high prices after the future price rises. Earn the difference profit. Short is to estimate that the market outlook will fall, so sell the contract and buy the contract at a low price after the future price falls. Earn the difference profit. 2. As far as hedging is concerned, doing more is to avoid or hedge the risk of increased production costs caused by future price increases and lock in costs in advance. Short selling is to avoid or hedge the risk of profit decline caused by future price decline and lock in profits in advance. The object of futures trading is standardized contract, which is a purchase contract in the form of "order". The contract stipulates the time for the physical and payment transactions (one or several days in the future), and there is no need to pay for the goods in one hand and deliver them in the other (in fact, stocks are spot transactions). Buyers and sellers only need to "pay" a deposit of about 10% of the purchase price to the exchange.

Therefore, for short investors, as long as they think that the price of a futures product will fall, they can "sell the goods first" at the current price when there is no spot, that is, open a futures sell order, and then complete the delivery with the spot when the contract expires. At this time, if the variety really falls as investors judge, then he can buy the spot at a lower price in the market and deliver it to the contract holder, who needs to pay the payment at the agreed price at that time, so that the short investors can get the difference income. Of course, short sellers can also transfer to other investors before the contract expires, and get benefits in advance; At the same time, you can also close the position with the other party by agreement, and you don't need to deliver the spot, you can also get the spread income.

For example, on March 4, 2008, investor A shorted the sugar 0809 contract, issued a sell order at a price of 4800 yuan/ton (1 lot 10 ton, with a margin of 10%), and paid 4800 yuan; Subsequently, he held the order date and closed his position at the price of 4 100 yuan/ton on March 7, 2008, that is, he transferred the order to other investors, so that investor A made a profit of (4,800 yuan/ton -4 100 yuan/ton) × 10 ton = 7,000.

Example 2: sell first and then buy, and explain the principle of short-selling profit in futures in an easy-to-understand way.

First of all, Zhang San learned that the price of apples in the market is 10 yuan/kg, and thinks that the price will inevitably fall;

Secondly, Zhang San and Li Si signed an order, stipulating that one month later, Li Si would buy 10 kg of apples from Zhang San at the price of 10 yuan/kg. At the same time, both parties * * * found Wu Wang as the supervisor, and each paid Wu Wang 10 yuan as the down payment for the performance of the contract, that is, the down payment was10% of the contract amount;

Finally, a month later, the apples in the market fell to 9 yuan/Jin. Zhang Sanhua 90 yuan bought 10 Jin of apples and gave them to Li Si, who paid Zhang San 100 yuan. At the same time, Wang Wu returned their respective deposits 10 yuan to Zhang San and Li Si.

In this process, Zhang San shorted apples, sold them first and then bought them, and earned 10 yuan. Warren and Niuxiong Securities (similar to domestic warrants) are the most suitable financial derivatives for domestic investors to make long short, with the characteristics of long, long, bullish (upward direction), short, bearish and bearish (downward direction), and the operation method is the same as buying and selling stocks. As the name implies, financial derivatives are derivatives of related assets (stocks or stock indexes), and the attributes of derivatives have leverage effect, that is, amplification effect. If you do more, the related assets will go up, and the subscription certificate and cattle certificate will be profitable. If you are short, the related assets will fall, and the put card and the put card will be profitable.