1, contract standardization

Futures trading is standardized by buying and selling futures contracts. The standardization of futures contracts means that all terms of futures contracts except price are stipulated by futures exchanges in advance, which has the characteristics of standardization.

The standardization of futures contracts has brought great convenience to futures trading, and both parties need not negotiate on the specific terms of the transaction, which saves trading time and reduces trading disputes.

2. Centralized trading

Futures trading must be conducted in a futures exchange. The futures exchange implements the membership system, and only members can enter the market for trading. Those off-site customers can only entrust trading agents, that is, futures brokerage companies to participate in futures trading.

Therefore, the futures market is a highly organized market, and strict management system is implemented, and futures trading is finally completed in the futures exchange.

3. Two-way trading and hedging mechanism

Two-way trading, that is, futures traders can buy futures contracts as the beginning of futures trading (called buying positions) or sell futures contracts as the beginning of trading (called selling positions), commonly known as "short selling".

There is also a hedging mechanism associated with the characteristics of two-way trading. In most futures trading, when the contract expires, it is not fulfilled by physical delivery, but by trading in the opposite direction to the opening direction.

Specifically, after buying a warehouse, you can cancel the performance responsibility by selling the same contract, and after selling a warehouse, you can cancel the performance responsibility by buying the same contract.

The characteristics of two-way trading and hedging mechanism of futures trading attract a large number of futures speculators to participate in trading, because speculators have double profit opportunities in the futures market. When futures prices rise, they can buy low and sell high to make a profit. When prices fall, they can make profits by selling high and buying low, and speculators can avoid the trouble of physical delivery through hedging mechanism. The participation of speculators has greatly increased the liquidity of the futures market.

4. Leverage mechanism

Futures trading implements margin system, that is to say, traders only need to pay a small amount of margin, which is generally 5%- 10% of the contract value, and can complete several times or even dozens of times of contract transactions. This feature of futures trading attracts a large number of speculators to participate in futures trading.

One of the characteristics of futures trading is that it can make a big investment with little money, which is vividly called "leverage mechanism". The leverage mechanism of futures trading makes futures trading have the characteristics of high returns and high risks.

5. Daily debt-free settlement system

The daily debt-free settlement system, also known as the daily mark-to-market system, refers to the exchange's settlement of all contracts' profits and losses, trading deposits, handling fees, taxes and other expenses according to the settlement price of each contract on the day after the daily trading, and the net transfer of accounts receivable and payable, and the corresponding increase or decrease of members' settlement reserves. Broker members are responsible for the settlement of customers in the same way.

Extended data:

Main characteristics of futures trading

1, small and wide

Futures trading only needs to pay 5- 10% performance bond, and it can complete several times or even dozens of times of contract transactions. Due to the leverage effect of the futures trading margin system, it has the characteristics of "small and wide", and traders can use a small amount of funds to conduct large transactions, saving a lot of working capital.

2. Two-way transaction

In the futures market, you can buy first and then sell, or you can sell first and then buy, so the investment method is flexible.

3. Don't worry about performance.

All futures transactions are settled through the futures exchange, which becomes the counterparty of any buyer or seller and provides guarantee for each transaction. So traders don't have to worry about the performance of the transaction.

4. Market clarity

Trading information is completely open, and trading is conducted by means of open bidding, so that traders can compete openly under equal conditions.

5. Tight organization and high efficiency

Futures trading is a standardized transaction with fixed trading procedures and rules, which are linked one by one and operate efficiently. A transaction can usually be completed in a few seconds.

Baidu encyclopedia-futures trading