For example, the price of a ton of copper is 60 thousand, and 5 tons needs 300 thousand.
However, in futures trading, the general margin level of margin system is 15% to 18%.
In this way, the fund for trading 5 tons of copper in futures (the trading unit in futures is 1 lot =5 tons) is 300,000x15% = 45,000.
The landlord can clearly see that the futures account for much less money than the spot for the same transaction volume.
This will allow the funds in hand to do more transactions. The bigger the business, the more profits you earn.
The leverage of futures is like this.
Generally speaking, futures can enlarge funds by 6 times, reaching 10 times. This is entirely determined by the margin level.
In addition, remind the landlord that the deposit will enlarge the investor's funds and enlarge the risks.
The so-called, high risk, high income; High return, high risk. Risk is closely related to profit.