01 Market risk

Market risk refers to the biggest risk for customers in futures trading, which comes from the fluctuation of market prices. Such price fluctuations pose a risk to customers of trading profits or losses. Moreover, because of the effect of leverage, this risk is amplified. Investors should always pay attention to their futures accounts.

02 Forced Liquidation Risk

(1) Investors are required to pay a margin for futures trading. As a financial guarantee for the performance of futures contracts, investors should always pay attention to their account status. If investors The equity in the account is insufficient to cover the margin and needs to make up funds within the specified time or close the position on its own, otherwise the futures position held by it will be forcibly closed by the futures company.

(2) Because the position limits of each futures contract are different in each time period, investors need to adjust their futures contract positions in a timely manner to avoid being over-limited by futures companies or traders. The position was forcibly closed.

03 Delivery Risk

Futures contracts have expiration dates. When the contract expires, all open contracts must be physically delivered. Therefore, customers who are not prepared to make delivery should promptly close their open positions before the contract expires to avoid liability for delivery breach and avoid unnecessary losses.

04 Operational risk

In futures investment, risks caused by human errors or computer system failures are called operational risks. Futures trading involves many trading parameters. When placing an order, investors need to check the price, lot size, contract, opening and closing positions, and buying and selling direction of the order to avoid unnecessary losses caused by operational errors

05 Liquidity risk

Due to the poor liquidity of the futures contract market, it is difficult for futures transactions to be completed quickly, timely and conveniently. This risk is particularly prominent when investors close positions, especially when futures prices show continuous unilateral trends, or when delivery is approaching and market liquidity decreases. Therefore, investors need to pay attention to the trading activity of each futures contract in a timely manner to avoid entering a unilateral market dominated by a strong unilateral force and causing unnecessary losses.

Risks and returns go hand in hand with futures trading. Therefore, investors must always maintain a clear understanding of the risks when trading futures. Under the premise of effectively controlling investment risks, futures trading can achieve investment goals.