What Is the Futures Market?

A futures market is a trading place or field that is traded according to an agreed agreement and delivered on a predetermined date. The significant difference between spot and futures is that the delivery period of the futures is placed in the future, and the price, quantity and method of delivery and payment, location, and other conditions are stipulated in the contract by the buyer and seller at the spot. Trading on the futures market. Although the contract has been signed, the goods bought and sold by the two parties may be in transit, may be in production, or may not even be put into production. The seller may have the goods or securities, or may not have the goods or securities. ^[1]

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A futures market is a trading place or field that is traded according to an agreed agreement and delivered on a predetermined date. The significant difference between spot and futures is that the delivery period of the futures is placed in the future, and the price, quantity and method of delivery and payment, location, and other conditions are stipulated in the contract by the buyer and seller at the spot. Trading on the futures market. Although the contract has been signed, the goods bought and sold by the two parties may be in transit, may be in production, or may not even be put into production. The seller may have the goods or securities, or may not have the goods or securities. ^[1]

The futures market in a broad sense includes

(One)

1. Law. That is, the basic laws on the futures market formulated and promulgated by the Standing Committee of the National People's Congress. My country

The role in macroeconomics

1. Regulate market supply and demand and slow down price fluctuations;

2. Provide reference for government macro control;

3 Promote the international development of the country's economy;

4 Contribute to the establishment and improvement of the market economy system.

Role in the microeconomy

1. Forming a fair price;

2. Offer to transaction

Risk management and control is the primary task of the exchange

Throughout the development history of the international futures market for more than 100 years, risk management is an unavoidable problem for the organizers and managers of the futures market. The different development stages of the futures market are facing the difficult task of risk management and risk control. The bankruptcy case of the Bank of Bahrain in the United Kingdom that shocked the international financial and futures circles, and the national debt case of Yamato Bank of Japan strongly illustrate this point.

1. Causes and performance of risk management

Risk management is a topic of great concern to all aspects of society, including exchanges and brokerage companies. Risk comes from market uncertainty. Generally speaking, it can be divided into system risk and

According to foreign experience, the management of the futures market should be supervised by the government, the self-regulatory management of industry associations and the internal management of the futures market should form a complete management system. They are government supervision; futures industry associations; internal self-discipline management of the futures market.

1. Internal management system of the exchange

Membership system; margin system;

He Qiang, member of the CPPCC National Committee and professor of the Central University of Finance and Economics, proposed that the relevant ministries and commissions formulate the "Futures Law" as soon as possible. He Qiang believes that the "Futures Law" is conducive to further safeguarding the security of futures trading and the stability of the futures market, and is conducive to their role in regulating and guiding the operation of futures markets.
Since the establishment of China's futures market in the early 1990s, after more than 20 years of development and standardization, China's futures market has gradually entered a benign track of sustained and stable development and increasingly obvious functions. In recent years, China's futures market has gradually diversified its trading varieties, its trading scale has steadily expanded,

There are so many stupid things in the futures market that those who are new to the market often do: Take great risks to earn small profits, such as grabbing rebounds on the limit stop, in fact walking on the blade; for a period of time When you make a profit, you start pursuing perfection and begin to predict extreme positions. You think that the faster the pace of the transaction, the safer it is. You do nt know that the accumulated losses and fees are terrible. In addition to high-frequency transactions involving IT technology, you want to really do a good job in the short-term. It is much more difficult than making a trend; if you have a small profit, you want to be safe. If you have a loss, you ca nt stop it. You completely depart from the principle of making large and small losses, and follow your inner feelings. The trend should be retraced, and the short trend should be rebounded. In the end, you will find that you can't catch any opportunities. You can use the full leverage as much as possible, regardless of your own affordability and no fund management. You will find that these problems are committed by everyone in the transaction, but none of them are related to the field of transaction technology. The technical aspects have always been mentioned in a higher position and are highly valued by traders, and the Tao is often ignored, and few people have thought about investment psychology and fund management issues. You need to reflect carefully: Since the profitable people in this market will always be a small number of people, why can you be one of them? Rely on others' ignorance and you are vigilant; reliance on others to make mistakes and you won't make them less or less. If you want to make a profit, you need to have discipline, methods, and beliefs. Maybe you have done all these stupid things.

China's economic growth has slowed from a high level, and has continued to go downwards. It is no longer possible for the growth rate of GDP to remain above double figures, and the economy is in a downward cycle. The risks we face, such as commodity risk, interest rate risk, exchange rate risk, and stock price fluctuation risk, are exacerbated by the uncertainty of the macroeconomic trend. At the same time, the huge risk exposure brought by the macroeconomic uncertainty at home and abroad, China is related The demand for hedging instruments by economic activity entities has surged. The futures market undoubtedly provides them with a convenient safe haven. The futures market is a risk management market and a wealth management market. Futures and related derivatives are the basic tools of national risk management. They are essential, very important and cannot be replaced. The status quo of China's futures market is that the overall size of the futures industry is small, and the industry's strength needs to be improved; the phenomenon of homogeneity of futures companies' business is serious, and large companies are lacking; the variety structure needs to be perfected; strategic varieties are lacking; the investor structure is irrational and it is responsible for fostering institutional investment The domestic futures market is relatively closed and it is imperative to open to the outside world; the launch of new varieties is accelerating; various new businesses are about to begin; the supervision and deregulation are strengthened; mergers and reorganizations of futures companies and IPO listing have become the trend.
At present, China's futures listed products: 5 categories, 28 commodities, 1 financial. Specifically, it includes 12 agricultural products, 8 metals, 1 energy source, 6 chemical industries, and 1 finance. Of the top ten commodity futures varieties with global trading volume in 2011, six belong to China. Nevertheless, the futures market in China still has the problem of urgently improving the variety structure and the lack of strategic varieties.
Futures market is the place where futures products are circulated. Without a sound and effective market, futures products will lose their existence. The commodity electronic trading market has many advantages over traditional trading forms. At this stage, it has played a positive role in promoting the construction of a multi-level market system in China, further optimizing the allocation of resources, promoting the informationization of the national economy, accelerating the circulation of commodities, and promoting the construction of a credit system. The traditional spot market is the foundation of the pyramid; the futures market was born on the developed spot and medium and long-term warehouse receipts market, and is an advanced form of market organization; the medium and long-term market is an indispensable and important part of a complete modern market system , Forming the tower part of the entire pyramid system. ^[3]