Signing a futures contract is to buy or sell physical forward goods at the current price. At the time of signing the contract, the forward value of the contract is agreed at the actual price, so the forward value of the contract is 0. Then, with the change of commodity futures price, the forward value of this contract in your hand also changes, so your contract has a spread, that is, an arbitrage opportunity. It's an opportunity to lose money.

Futures are the subject matter of present trading and future delivery. This subject matter can be gold, crude oil, agricultural products, financial instruments, financial indicators and other commodities. The delivery date of futures can be one week later, one month later, three months later or even one year later. Futures market first appeared in Europe. Futures is a tradable standardized contract with commodities or financial assets as the target.

Futures contracts are standardized contracts formulated by futures exchanges, which plan to deliver a certain number of subject matter at a specific time and place in the future.

The characteristics of futures mainly include

Contract standardization: before listing, set uniform trading rules for each futures product, including trading unit, quotation unit, minimum price change, price limit and minimum margin. Each variety corresponds to the contract of different months, delivery date and so on. These are open and fair to every trader who enters the market.

Margin trading: also known as leveraged trading, is the first-hand price of the actual transaction after the trader enters the market. This price is a certain proportion of the actual value of a specific product, generally between 5%- 15%. This system also determines that futures itself is leveraged!

Two-way trading: the biggest difference between futures and other investments is that futures can be done in two directions, that is, in the face of future market changes, it will only rise and not fall. According to the forecast of the future market, you can buy up or down, which is the biggest difference of futures.

Understanding of hedging: Generally speaking, as a natural person trader, he will choose hedging before the variety expires and will not hold the delivery month for delivery. Delivery is generally for bulk commodity spot enterprises, and delivery can only be carried out when there is spot in hand. Delivery needs to be applied to the exchange.

Debt-free settlement on the same day: at the close of each trading day, each contract will have a settlement price, regardless of whether you have a position in hand at this time, the difference will be settled! This profit and loss is called floating profit and loss. The final loss only needs to look at the opening and closing prices!