The standard warehouse receipt of futures is a kind of physical delivery certificate made by the futures exchange, which is delivered to the owner after the delivery goods are accepted and confirmed to be qualified in the delivery warehouse designated by the exchange. Futures standard warehouse receipts can be used as a circulation tool, as collateral for loans or for the delivery of futures contracts.
Why do spot merchants register warehouse receipts?
(1) The futures price is higher than the spot price, and the spread should reach a certain level;
(2) Spot vendors are not optimistic about the market outlook and think that the market outlook price will fall.
In short, the spot dealer should sell the spot in the futures market and complete the warehouse receipt registration. When the futures delivery month comes, the spot dealer holding the empty futures bill will notify the exchange for delivery.
Relationship between futures warehouse receipt and spot inventory
The number of registered warehouse receipts partly reflects the supply of goods in the market. A large number of warehouse receipts means sufficient supply, and a small number of warehouse receipts is also a kind of evidence of tight supply, but generally we can't draw the conclusion that the supply is tight based on this. Because the registered warehouse receipt can also be cancelled, but at this time, the goods marked by the warehouse receipt may not have left the warehouse, and may still be in the delivery inventory.
Sometimes, in order to affect the price, the makers (or the main holders of warehouse receipts) who participate in futures trading will change the inventory quantity announced by the exchange by registering or canceling warehouse receipts. For example, when the main force wants the price to rise, a large number of registered warehouse receipts are cancelled, which leads to the shortage of deliverable goods, which leads to traders' expectation of future prices, but in fact, deliverable goods have not decreased and are still stored in the warehouse. When the main force wants the price to fall, it can re-register the warehouse receipt, which will cause sufficient supply and suppress the price. The premise of registering warehouse receipts to change market supply is that there are enough goods on hand.
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