Doo Prime talks about the basic characteristics of futures!

Futures trading isDeveloped on the basis of contract trading. Futures trading should also pay attention to trading strategies. All futures trading is conducted in an organized futures marketdooprimeThe futures market has the following characteristics:

1. Contract standardization

Futures trading has the characteristics of standardization and simplification. Futures trading is carried out by buying and selling futures contracts, and futures contracts are standardized contracts. This standardization means that the grade, quantity and quality of commodities in futures trading are stipulated in advance, and only the price changes. This is an important feature of futures trading that is different from spot long-term trading. Standardization of futures contracts greatly simplifies trading procedures, reduces transaction costs, and minimizes disputes caused by different understandings of contract terms between the two parties.

2. Site fixation

Futures trading has the characteristics of organization and standardization. Futures trading is carried out on futures exchanges established by law, which are generally not allowed to be carried out over the counter, so futures trading is highly organized. Futures exchanges are venues where buyers and sellers gather for futures trading. They are non-profit organizations that aim to provide futures trading venues and trading facilities, formulate trading rules, act as transaction organizers, and do not interfere with futures trading activities or the formation of futures prices.

3. Unified settlement

Futures transactions have the characteristics of consistency in payment direction. Futures transactions are settled by clearing houses. All transactions reached on the exchange must be sent to the clearing house for settlement, and the final settlement becomes a legal transaction. The two parties to the transaction are independent, and only the clearing house is the counterparty, and only the clearing house bears financial responsibility. That is, in the payment direction, only the clearing house is paid, not the mutual payment between the two parties. This consistency in payment direction greatly simplifies the transaction procedure and the physical delivery procedure, and also creates the possibility for traders to "hedge" before the expiration of the futures contract and exempt themselves from the obligation of delivery at maturity.

4. Fixed-point delivery

In the futures market, physical delivery only accounts for a certain proportion, most of which are hedging knots. Futures trading. "Hedging" This mechanism exempts traders from the responsibility of having to make physical delivery. The experience of mature foreign futures market operations shows that because the cost of physical delivery in the futures market is often higher than the cost of direct spot transactions, most traders, including hedgers, hedge their positions at the end, and the proportion of final physical delivery is very small. Futures delivery must be carried out in a set delivery warehouse.

5. Brokerage of transactions

Futures trading has the characteristics of centralization and efficiency. This centralization means that the buyers and sellers who actually need to buy and sell futures contracts meet directly on the exchange. It means that the market broker represents all buyers and sellers in the futures trading market by issuing orders, and all trading orders are finally calculated on the spot.

6. Margin institutionalization

Futures trading has the characteristics of high credit. This high credit feature is concentrated in the futures fund system. Futures trading requires a certain margin payment. Traders entering the futures market must pay a certain amount of erformance bonds in accordance with the relevant regulations of the exchange, and maintain a minimum margin level during the trading process to provide guarantee for the trading of futures contracts. The implementation of the margin system not only makes futures trading have the principle of "small and broad" leverage, which attracts the participation of many traders, enabling clearing houses to provide erformance bonds for transactions reached and settled by the exchange to ensure that traders can fulfill the contract.

7. Product specialization

Futures trading is selective for futures commodities. Futures commodities are special. Many commodities that are suitable for trading in roses are not necessarily suitable for futures trading. This is the selective feature of futures trading for futures commodities.

Generally speaking, whether a commodity can be traded in futures depends on four conditions, according to Dooprime:

(1) Whether the commodity has price risk, that is, whether the price fluctuates frequently.

(2) Whether the owners and demanders of the goods desire safe haven protection.

(3) Whether the goods can be stored and transported.

(4) Whether the grades, specifications and quality of commodities are easy to divide. Products of different grades need to be discounted. These are the four most basic conditions. Only commodities that meet these conditions can be traded as futures.