In the futures market, most enterprises buy and sell futures contracts in order to avoid the risk of spot price fluctuation, while most investors seek to obtain the difference of price fluctuation. Therefore, few people are willing to participate in physical delivery, which ends in the form of hedging before maturity. Hedging means that people who buy futures contracts will sell them before the contract expires; People who sell futures contracts will buy futures contracts to close their positions before the contract expires. This kind of activity of buying before selling or selling before buying is allowed.
Basic characteristics of futures trading
Two-way trading: investors can buy first and then sell, or sell first and then buy, and the profit is not bound by any trading direction. It can be said that as long as the futures market fluctuates, there will be opportunities for profit. In the domestic stock market, there is only a long mechanism. Once the bear market begins, investors can only wait for the next bull market, resulting in the loss of funds and the waste of time.
Intra-day liquidation: T+0 trading system is implemented in futures trading, that is, the purchased contract can be liquidated on the same day, that is, it can be safely put in the bag when the profit is large on the same day, or it can be withdrawn in time when the short-term risk is large.
Margin leverage: paying a small amount of margin, generally 5%- 15% of the contract value, can complete several times or even ten times the contract transaction. "Small and wide" is an important reason why the futures market is attractive.
Daily debt-free settlement: calculate the interest of the open contract at the daily settlement price (the average contract price of the day), add the profit of the open contract of the day to the customer account, or deduct the loss of the open contract of the day from the customer account. Daily settlement in futures trading is different from clearing settlement in stock trading.