Futures trading is a process of buying and selling activities. The unique hedging function of futures trading, the function of preventing excessive market fluctuation, the function of saving commodity circulation costs and promoting fair competition are of great significance to the development of China's increasingly active commodity circulation system.
China's futures trading has made great progress. However, due to the lack of corresponding legislation, futures trading is in a state of no legal basis, and excessive speculation prevails. It is extremely necessary to strengthen the special legislation of futures trading.
Extended data
(1) speculation
Specific practice: investors keep buying or selling futures contracts according to their own judgment on the changes of futures prices, and obtain higher profits through the price difference.
(2) Hedging
Specific practices: producers, businessmen or consumers conduct a transaction with exactly the same variety and quantity but opposite positions in the futures market, that is, they buy (or sell) a certain commodity in the spot market and sell (or buy) futures contracts of the same and equivalent commodities in the futures market to offset or limit the risks brought by spot price fluctuations. The purpose of hedging is not to make a profit, but to hedge.
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