I spot trading and futures trading
There are two forms of commodity exchange: spot trading and futures trading. Spot contract refers to a sales agreement to deliver a commodity immediately or in the future. The quality, quantity and delivery date of the delivered goods shall be determined by the buyer and the seller through consultation. Because there are too many uncertainties in the spot contract, if the quality and quantity of the goods paid are inconsistent with the agreement, disputes will arise between the buyer and the seller. There are many kinds of spot trading agreements, which are mainly divided into spot delivery contracts and forward delivery contracts. The prompt delivery contract is concluded at the current market price, and the relationship between supply and demand and the price are extremely unstable. Forward delivery contract is an agreement reached by one-on-one negotiation between buyers and sellers on the quantity, quality, price and delivery time of goods. In many cases, spot forward delivery contract is more convenient for buyers and sellers than spot delivery contract. Because they can know the buying and selling price in advance, and they can save storage costs by delaying buying and selling. Without a forward contract, buyers and sellers must renegotiate the price. As spot forward contracts are usually non-standard contracts negotiated privately and are not bound by law, both parties to the contract bear certain risks. If the contracting parties fail to abide by the contract, or lack sufficient funds, or due to the influence of future emergencies, one or both parties may breach the contract, so the performance rate of the forward spot contract is low. Because the spot forward contract is one-to-one negotiation, it is specific and non-transferable, so the market liquidity is poor and the commodity trading efficiency is low. Analyze the real purpose of mainstream funds and find the best profit opportunities! )
Futures trading is mainly buying and selling futures contracts. Futures contract is a standardized contract reached in the exchange, which is legally binding and stipulates that a specific commodity will be delivered at a specific place and time in the future. The quantity, quality, delivery time and place of commodity contracts used for trading are fixed, and the only variable is the price. Futures prices are generated in the trading hall of organized futures exchanges through transactions similar to auctions. Because futures contracts are standard contracts, they can be transferred many times in the market, and each transfer only needs to agree on the price, which allows buyers and sellers to exchange one contract for another to offset the responsibility of the signatory to deliver the actual spot. In the futures market, buying (selling) a contract and then selling (buying) a contract with the same value is called liquidation or settlement.
Hehe, I'm not sure. I am an amateur, too. I found it online. sorry I can not help you with anything.