Short selling refers to selling standard contracts at prices that are expected to fall in the future, and buying them after the market falls to make a profit.

Futures implement a margin mechanism, trading the standard contract of the commodity rather than the commodity itself. Therefore, only a certain margin is needed in futures, and goods can be bought and sold directly as needed. Short selling is the operation of selling commodity contracts directly when the expected commodity prices fall.

Because we are selling commodity contracts for delivery at a specific time in the future, we only need to fulfill the contracts before the expiration date, and there is no need to have corresponding contracts when selling. Means of performance are divided into hedging and delivery. Hedging refers to buying equal contracts to close positions, and delivery refers to taking out qualified physical objects.

Simply put, futures trading involves three things: a contract, buying (contract or actual commodity) and selling (contract or actual commodity). If it is the buyer in the contract, then after the contract is fulfilled, the seller (contract or actual goods) has completed a win-win transaction.

If you are the seller in the contract, you must buy (contract or actual goods) or sell (contract or actual goods) before or during the performance of the contract, and you will also complete a make-or-break transaction. The deposit (usually 00% of the transaction amount of 65438+) is used to ensure that the buyer must buy at the contract price and the seller must sell at the contract price during the contract period.

To put it bluntly, shorting futures is to be a seller in the contract and want to complete the trading behavior of selling high and buying low.

Extended data

The difference between short selling and stop loss

The biggest difference between short selling and stop loss is that after the stop loss is sold, it may not be bought back, and the financial loss caused is very realistic and cruel. Short selling means buying back on dips after selling, and making profits by reverse operation without expanding the loss of the original quilt cover.

Therefore, short selling is more acceptable to investors than stop loss. Compared with stop loss, investors have more stable mentality, more decisive actions, lower error rate and higher success rate.

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