The full name of stock index futures (SPIF) is stock index futures, which can also be called stock index futures and futures index. It refers to the standardized futures contract with the stock price index as the subject matter. The two parties agree to buy and sell the underlying index according to the size of the stock price index determined in advance at a future date, and settle the difference in cash after the expiration.
As a type of futures trading, stock index futures trading has basically the same characteristics and processes as ordinary commodity futures trading.
Stock index futures are a kind of futures, which can be roughly divided into two categories, commodity futures and financial futures.
Stock index futures:
Futures is a trading contract that is bought and sold before the agreed price. Futures trading is divided into speculation and delivery. Speculation earns the difference by buying low and selling high or buying high and selling low. Delivery is a transaction that is executed in the future by locking the transaction price in advance. Taking gold futures as an example, the price of gold is 12 1 1 USD/oz. Party A and Party B signed a gold futures contract with the delivery date of 20 16070 1. Party A is the buyer and Party B is the seller. If the 20 16070 1 contract expires, the gold price will reach 1300 USD/oz, and Party B still needs to pay 1238.
Main functions:
1. Avoiding investment risks When investors are not optimistic about the stock market, they can short the futures through the hedging function of stock index futures to lock in the book profit of the stock, so there is no need to throw out the stocks they hold, resulting in a panic decline in the stock market.
2. Reducing stock market volatility Stock index futures can reduce the daily average amplitude and monthly average amplitude of the stock market, and restrain irrational fluctuations of the stock market. For example, in the five years before the introduction of stock index futures, the daily average amplitude of the Shanghai and Shenzhen 300 Index was 2.5 1%, and the monthly average amplitude was 14.9% in the five years after the introduction, and the monthly average amplitude was 14.
3. Enriching investment strategies Financial derivatives such as stock index futures provide investors with risk hedging tools, which can enrich different investment strategies, change the status quo of consistency of stock market trading strategies, provide investors with diversified wealth management tools, and achieve long-term stable income goals.