Futures trading, also known as futures trading, is the main business of the exchange, and the exact name is futures contract trading. Buyers and sellers only trade futures contracts, not actual commodities. Futures contracts are formulated by the exchange, which stipulates the commodity name, grade, quantity unit, futures delivery time, margin and other conditions. When buying and selling, you only need to determine the price, delivery month and contract quantity.
Futures trading can be divided into two types:
1. Hedging transaction, also known as securities trading. Its practice is to buy and sell the same commodity in the same quantity in both the physical market and the futures market, that is, to buy or sell the same number of futures contracts in the futures market at the same time. After a period of time, if the physical price changes lead to profits or losses, the losses or profits on futures trading contracts can be compensated or offset. Therefore, the fundamental purpose of hedging transactions is to minimize the risks brought by changes.
2. Speculation, the purpose of speculation is to get speculative profits by buying short and selling short the estimate of price rise or fall. When it is estimated that the price of a commodity may rise, speculators buy futures. When the futures expire, if the price does rise, they will sell the futures they originally bought at a lower price at the rising spot price. This can earn a certain price difference. If the price of a commodity is considered bearish, speculators sell futures. When the futures expire, if the price really falls, buy the spot at the falling price, fulfill the futures obligation that was originally sold at a high price, and earn profits. Speculators can use the fluctuation of futures prices to speculate, or they can use the price difference between spot and futures to speculate and arbitrage, use the price difference between different exchanges of the same commodity to speculate and arbitrage, and use the price difference between replaceable commodities and convertible commodities to speculate and arbitrage. Speculation is an adventure, and the key to success lies in the judgment of market prospects. Correct judgment may lead to profit, while wrong judgment will lead to loss.
What is options trading-
Label: options trading
Options are options. After paying a certain amount of royalties to the seller, the buyer of options obtains this right, that is, the right to sell or buy a certain number of subject matter (physical objects, securities or futures contracts) at a certain price (exercise price) within a certain period of time. When the buyer of the option exercises his rights, the seller must fulfill the obligations stipulated by option contracts. On the contrary, the buyer can give up exercising the right, at which time the buyer only loses the patent fee and the seller earns the patent fee. In short, the buyer of the option has the right to exercise the option, but has no obligation to exercise it; The seller of the option only performs the obligation of the option.
Options are mainly composed of the following factors: (1) strike price (also called strike price). The buying and selling price of the subject matter specified in advance when the buyer of the option exercises his rights. (2) royalties. Option price paid by the option buyer, that is, the fee paid by the buyer to the option seller for obtaining the option. (3) Performance bond. The option seller must deposit the performance bond in the exchange. (4) Call options and put options. Call option refers to the right to buy a certain number of subject matter at the execution price within the validity period of the option contract; Put option refers to the right to sell the subject matter. When the option buyer expects the target price to exceed the strike price, he will buy a call option, and vice versa.
According to the different execution time, options can be mainly divided into two types: European options and American options. European option refers to the option that can only be exercised on the expiration date of the contract, which is adopted in most OTC transactions. American option refers to the option that can be exercised on any day within the validity period after its establishment, which is mostly adopted by the floor exchange.
For example:
(1) call option: 65438+ 10/,the subject matter is copper futures, and the exercise price of the option is 1 850 USD/ton. A buys this right and pays $5; Sell this right and get 5 dollars. In February 1, copper futures price rose to 1905 USD/ton, and call option price rose to 55 USD. A can adopt two strategies:
Exercise-A has the right to buy copper futures from B at the price of 1850 USD/ton; After A puts forward the requirement of this exercise option, B must meet it. Even if B has no copper, it can only be bought in the futures market at the market price of 1.905 USD/ton, and sold to A at the exercise price of 1.850 USD/ton, while A can be sold in the futures market at the market price of 1.905 USD/ton, making a profit of 50 USD. B lost 50 dollars.
Bear-A can sell a call option for $55, and A will make a profit of $50 (55-5).
If the copper price falls, that is, the copper futures market price is lower than the final price 1850 USD/ton, A will give up this right and only lose the royalty of 5 USD, while B will gain a net profit of 5 USD.
(2) Put option: 65438+ 10 month 1, the strike price of copper futures is 1750 USD/ton, and A buys this right and pays 5 USD; Sell this right and get 5 dollars. In February 1, copper price fell to 1695 USD/ton, and put option price rose to 55 USD. At this time, A can adopt two strategies: exercise the right-A can buy copper from the market at the market price of 1.695 USD/ton, and sell it to B at the price of 1.750 USD/ton, and B must accept it, from which A gains 50 USD and B loses 50 USD.
Put option -A can sell the put option for $55. The profit is 50 dollars.
If the copper futures price rises, A will give up this right and lose $5, while B will get $5.
Through the above examples, we can draw the following conclusions: First, as the buyer of options (whether call options or put options), he has only rights but no obligations, and his risks are limited (the biggest loss is royalties), but his profits are theoretically unlimited. Second, as a seller of options (whether call options or put options), he has only obligations but no rights. Theoretically, his risks are infinite, but his income is limited (the biggest income is royalties). Third, the buyer of the option does not need to pay a deposit, while the seller must pay a deposit as a financial guarantee for fulfilling the obligation.
Option is an important hedging derivative tool to meet the needs of international financial institutions and enterprises to control risks and lock in costs. 1997 The Nobel Prize in Economics was awarded to the inventor of the option pricing formula (Black-Scholes formula), which also shows that international economists attach importance to option research.
Spot trade is a standardized commodity trade and the highest form of commodity trade.