Wikipedia
Futures are the opposite of spot. Futures are bought and sold now, but will be settled or delivered in the future, either as a commodity such as gold, crude oil, agricultural products, a financial instrument, or as a financial indicator. The date of delivery of futures can be a week later, a month later, three months later, or even a year later. The contract or agreement to buy or sell futures is called a futures contract. The place where futures are bought and sold is called the futures market. Investors can invest or speculate in futures. Improper speculation in futures, such as short selling without cargo, can lead to turmoil in financial markets.
Table of Contents
History of Futures
Basic Terminology
Key Features of Futures Contracts
Components
Content Content
Content of Terms of Futures Contracts
Contract Functions
Role of Futures
Classification of Futures Transactions
Characteristics
Functions
Conceptual Comparison of Futures and Stocks
Futures and Options
Futures and Spot
Futures Trading and Spot Trading
Futures Market Basic System
Role
Futures Hedging
Futures Hedging Methods (1) Cross-delivery Month Arbitrage (Inter-Monthly Arbitrage) <
(2) cross-market arbitrage (cross-market arbitrage)
(3) cross-commodity arbitrage
China's futures varieties
Related books
List of the world's major futures exchanges
Futures trading platforms that are available to investors
Exam books
Tools to predict futuresHistory of futures
The history of futures
Basic Terminology
Futures Contracts Main Features
Components
Content Content
Content Terms Content of Futures Contracts
Contract Role
Futures Role
Futures Trading Classification
Characteristics
Functions
Conceptual Comparison Futures vs. Stocks
Futures and Options
Futures and Spot
Futures Trading and Spot Trading
Futures Markets Basic Institutions
Role
Futures Hedging
Futures Hedging Methods
(1) Cross-delivery Month Arbitrage (Cross-Monthly Arbitrage) (2) Cross-Market Arbitrage (Cross-Market Arbitrage) ( (3) cross-commodity arbitrageChina's futures varietiesRelated booksMajor global futures exchangesList of futures trading platforms available to investorsExamination booksPrediction of futures toolsExpansion of futures EditThis section of the history of futures
Futures in English, Futures, is evolved from the word "future", which means: the transaction is not necessary for both parties to buy and sell at the initial stage of the occurrence of the transaction. The two parties do not have to deliver the actual goods at the beginning of the sale, but *** with the agreement to deliver the actual goods at a certain time in the future, so the Chinese call it "futures". The initial futures trading from the development of spot forward trading, the initial spot forward trading is a verbal commitment between the two sides at a certain time futures conference
Between the delivery of a certain number of commodities, and later with the expansion of the scope of the transaction, the verbal commitment is gradually replaced by the purchase and sale of the contract. This contract behavior is increasingly complex, there is a need for intermediary guarantee, in order to monitor the buyer and seller on schedule delivery and payment, so there was the world's first commodity forward contract exchange opened in London in 1571 - the Royal Exchange. In order to adapt to the continuous development of the commodity economy, in 1848, 82 merchants initiated the organization of the Chicago Board of Trade (CBOT), the purpose is to improve the transportation and storage conditions, to provide information to the members; in 1851, the Chicago Board of Trade introduced forward contracts; in 1865, the Chicago Grain Exchange launched a known as "futures contract In 1865, the Chicago Grain Exchange introduced a standardized agreement known as the "futures contract" to replace the original use of forward contracts. The use of this standardized contract, allowing the contract to change hands, and gradually improve the margin system, so a special trading standardized contract futures market was formed, the futures become an investment tool for investors. 1882 exchange allows hedging to exempt the performance of the responsibility to increase the liquidity of futures trading. The background of China's futures market is the reform of the grain distribution system. With the abolition of the state policy of unified purchase and sale of agricultural products, liberalization of the prices of most agricultural products, the market's role in regulating the production, circulation and consumption of agricultural products is becoming increasingly large, the ups and downs of agricultural prices and spot prices of undisclosed as well as distorted phenomena, the ups and downs of agricultural production and the lack of value preservation mechanisms for grain enterprises and other issues have attracted the attention of the leadership and scholars, can we not set up a mechanism to provide guidance for both In February 1988, the leadership of the State Council instructed the relevant departments to study the futures market system in foreign countries to solve the problem of price fluctuations of domestic agricultural products, in March 1988, the seventh session of the National People's Congress of the "Government's Work Report" put forward: the active development of various types of wholesale trade markets, explore the Futures trading. The prelude to the research and construction of China's futures market was opened. October 12, 1990 Zhengzhou Grain Wholesale Market was approved by the State Council to be established, based on spot trading, the introduction of futures trading mechanism, took the first step in the development of China's futures market; May 28, 1991 Shanghai Metals Commodity Exchange opened; June 10, 1991 Shenzhen Nonferrous Metals Exchange was established; September 1992, the first futures brokerage company --- Guangdong Vantone In September 1992, the first futures brokerage company, Guangdong Vantone, was established, marking the resumption of the futures market in China after a hiatus of more than 40 years. On February 28, 1993, Dalian Commodity Exchange was established; on September 8, 2006, China Financial Exchange was established. On April 16, 2010 China launched the first domestic stock index futures, the CSI 300 stock index futures contract.
Edit this section of the basic terminology
Futures contracts: for the unified development of the futures exchange, the provisions of a specific time and place in the future delivery of a certain quantity and quality of the underlying standardized contracts. Margin: refers to the funds deposited by futures traders in accordance with the prescribed standards for settlement and guarantee of performance. Settlement: refers to the clearing of funds according to the settlement price announced by the futures exchange for the trading profit and loss status of both parties. Settlement: The process by which a futures contract expires, and the two parties to the transaction close out their open positions by transferring ownership of the commodities contained in the futures contract in accordance with the rules and procedures of the futures exchange [1]. Open position: the beginning of the purchase or sale of futures contracts trading behavior is called "open position" or "establish a trading position. Closing a position: refers to futures traders to buy or sell their futures contracts of the same species, quantity and delivery month, but the opposite direction of the futures contract, the end of futures trading behavior. Position: refers to the number of open positions held by futures traders. Warehouse Receipt: A standardized receipt issued by a delivery warehouse and recognized by a futures exchange. Futures K chart
Summarization of transactions: refers to the process of matching the trading orders of the two sides of the computerized trading system of the futures exchange. Includes market maker approach and bidding approach. Up/Down Stop: It means that the trading price of a futures contract in a trading day shall not be higher or lower than the specified up/down range, and the offer exceeding this up/down range will be regarded as invalid and cannot be transacted. Forced Position Closure System: This refers to the system of forced position closure implemented by futures brokers in order to prevent further expansion of risks when the client's trading margin is insufficient and is not replenished within the prescribed time, the client's position exceeds the prescribed position limit, the client is penalized for violation of the law, and the position should be closed out according to the Exchange's emergency measures, and other situations that should be closed out forcibly. Arbitrage: A trading technique that can be used by speculators or hedgers to buy spot or futures commodities in one market while selling the same or similar commodities in another market, with the hope that the two transactions will produce a spread and profit. Open, hold and close positions: futures trading in the buy and sell behavior, as long as the new position is called open. The position held in the hands of the trader, known as the position. Close the position is the trader to close the position of the trading behavior, the way to close the position for the direction of the opposite hedge trading. Due to the different meanings of open and close positions, traders in the purchase and sale of futures contracts must specify whether to open or close positions. Example: an investor in December 30th to buy the March CSI 300 index futures 10 hands (sheets), the transaction price of 1450 points, at this time, he has a long position of 10 hands. To January 10 next year, the investor saw the futures price rose to 1500 points, so according to this price to sell and close the position of 5 hands of March stock index futures, after the transaction, the investor's actual position is still 5 hands of long single. If the day the investor reported in the statement reported is sold to open a position of 5 hands of March stock index futures, after the transaction, the investor's actual position should be 15 hands, 10 hands of long positions and 5 hands of short positions. Blowout: This is when an investor's account equity is negative. Indicates that the investor not only lost all the margin and also owe the debt to the futures brokerage company. Due to the implementation of futures trading day-by-day liquidation system and the mandatory close-out system, under normal circumstances, the burst position is not going to happen. But in some special circumstances, such as in the market jumped when the change, the position is heavier and the opposite direction of the account may occur. Occurs when the burst position, investors must be timely to make up the shortfall, or will face legal recourse. In order to avoid this situation, the need for special control of the position, do not like stock trading as full operation. And the market for timely tracking, not like stock trading as a buy. Long and short: futures trading two-way trading mechanism, both buyers and sellers. In futures trading, the buyer is called long, the seller is called short. Although in stock market trading, the buyer is also called long and the seller is called short. However, the seller in stock trading must be the one who holds the stock, and the one who does not have the stock cannot sell. Settlement price: the price of a futures contract traded on the day by the volume of the weighted average price. No transaction on the day, the settlement price of the previous trading day as the settlement price for the day. Settlement price is the settlement of the day's open positions and the development of profit and loss settlement of the next trading day stop amount of the basis. Volume: refers to a futures contract in the day trading period of the bilateral number of all traded contracts. Position: refers to the bilateral number of open positions held by futures traders. Total Position: The total number of "open positions" in the futures contract held by all investors in the market. There is a special "Total Positions" section in the market information published by the exchange. Changes in the total position reflect investors' interest in trading the contract and are an important indicator of investor participation in trading the contract. If the total position in the continuous growth, indicating that both sides of the transaction are opening positions, investor interest in the contract in the growth of over-the-counter funds in the continuous influx of the contract trading; on the contrary, when the total position continues to decrease, indicating that both sides of the transaction in the closed out, the interest of traders in the contract in the ebb and flow. There is also a situation when the trading volume grows, but the total position changes little, which indicates that the market is dominated by changing hands.
Changing hands trading: Changing hands trading has "long for hands" and "short for hands", when the original holders of long traders to sell and close the position, but the new long and open the position to buy called "long for hands "; and "short for hand" refers to the original holders of short traders in the buy to close positions, but the new short in the open position to sell. Trading Instructions: There are three types of instructions for stock index futures trading: market orders, limit orders and cancel orders. Trading instructions are valid on the same day, and before the instruction is finalized, the customer can propose changes or cancellations. First, the market price instruction: refers to not limit the price of the purchase and sale declarations, as far as possible, the best price in the market to close the order. Second, the limit order: refers to the implementation of the order must be limited to the price or better price of the transaction. It is characterized by the transaction, must be the customer's expected or better price. Third, cancel the instruction: refers to the customer will be previously issued by a command to cancel the instruction. If the cancellation of the instruction before the effective date, the previous instruction has been sold, it is called cancel less than, the customer must accept the results of the transaction. If part of the transaction, the remaining part of the cancellation is still pending. Hedging: The purchase (sale) of a corresponding futures contract with a comparable quantity and similar maturity of a commodity operated in the spot market, but in the opposite direction of trading, with a view to offsetting the actual price risk of this commodity or financial instrument due to changes in the market price at a certain time in the future by selling (buying) the same futures contract. Margin: Margin is the financial guarantee required by the exchange to ensure the performance of the investor, the investor is responsible for the trading part of its holdings expressed by the credibility of the deposit of a sum of money in its account. According to the different nature, the margin is divided into trading margin, settlement margin and additional margin three. Transaction margin refers to the investor in the exchange special settlement account to ensure the performance of the funds, is the contract has been occupied by the margin; settlement margin is the investor in the exchange special settlement account in addition to the exchange has been occupied by the remaining part of the transaction margin. Margin call means that if the equity of the investor's account on that day is less than the margin of the position, it means that the fund balance is negative, and it also means that the margin is insufficient. As a rule, futures brokers will notify the account owner to replenish the margin before the market opens on the next trading day. This is called a margin call. Forced Closeout: If the account owner does not replenish the margin before the market opens on the next trading day, the futures brokerage firm may, in accordance with the regulations, partially or fully close out the account owner's position until the margin retained meets the prescribed requirements. Position Limit: i.e. Trading Position Limit. Refers to the maximum limit set by the exchange on the number of futures contracts an investor can hold, from the market share allocation aspects of market risk management. Bidding method: computerized settlement. Computerized summary transaction is an automated trading method designed according to the principle of open outcry, which has the advantages of accuracy, continuity, speed and large capacity. Futures trading in the early days, due to the lack of computers, so in the transaction are used in the open outcry mode. Open outcry usually has two forms: one is the continuous bidding system (moving disk), refers to the field traders in the exchange trading pool face-to-face open outcry, expressing their respective requirements to buy or sell contracts. This bidding method is the mainstream of futures trading, European and American futures markets are used in this way. The advantage of this way is the atmosphere of the field is active, but the defect is the size of the personnel by the site limitations. Numerous traders crowded in the trading pool, crowded, so that traders have to use hand signals to help pass the transaction information. Another drawback of this approach is that on-floor traders have more information and time advantages than off-floor traders. Hat-trading often becomes the preserve of the floor trader. Another form of open outcry is Japan's one-section-one-price system. A section of a price system to each trading day is divided into a number of sections, each section of the transaction in a contract only a price. Each section of the transaction by the host first call price, the field traders according to its call to declare the number of buying and selling, if the amount of buying more than selling, then the host of another higher price; Conversely, it is a lower price, until the number of buyers and sellers in a price equal to the number of transactions until. After the popularization of computer technology, exchanges around the world have used computers to replace the original public call. Position: A market agreement that neither the number of futures contracts bought or sold is hedged. For buyers, said to be in a long position; for sellers, said to be in a short position. Positions: refers to the buyer and seller open not yet the implementation of the reverse closing operation of the total number of contracts. The size of the position reflects the size of the market transaction size, but also reflects the short and long sides of the current price level of the size of the disagreement. For example: assuming that two people as counterparties, one person to open a position to buy 1 lot of contracts, another person to open a position to sell 1 lot of contracts, the position is shown as 2 lots. Inside the disk, outside the disk: equivalent to the stock software inside and outside the disk. Such as: commission to the seller of the transaction into the "foreign exchange", commission to the buyer of the transaction into the "internal market". The sum of "outside" and "inside" is the volume. Total lot: refers to the time up to the present, the total number of lots of this contract **** transaction. Domestic is to both sides of the transaction of 1 lot each calculated as 2 lots traded, so you can see the end of the number are double digits. Commission ratio: refers to a period of time to measure the relative strength of the buy and sell disk indicators, the formula is: Commission ratio = 〖(Commission buy the number of hands - Commission sell the number of hands) ÷ (Commission buy the number of hands + Commission sell the number of hands) 〗 × 100% Position difference: is the abbreviation of the difference between the position, refers to the current position and yesterday's closing price corresponds to the difference between the amount of the position. Positive is today's position increased, negative is the position is reduced. The difference between the positions is the change in the positions. For example, today's November stock index futures contract position is 60,000 lots, while yesterday it was 50,000 lots, so the difference between today's position is 10,000 lots. Another: in the transaction column also has the position difference change, in this case is now this one transaction order triggered by the position change with the last instant position of the comparison, is it an increase or decrease in the position. Long open: is the abbreviation for long open position, means that the position increases, but the increase in the value of the position is less than the current volume, and active buying. Short open: is short of opening a position, refers to the increase in the volume of positions, but the value of the increase in the volume of positions is less than the current volume, and for the active selling; for example: the above example of selling, buying can be reversed. Double open: refers to a transaction, the opening volume is equal to the current volume, the closing volume is zero, the position increased, the difference is equal to the current volume, indicating that both the short and long sides of the increase in positions. Double flat: refers to a transaction, the opening volume is equal to zero, the closing volume for the current volume, the position decreased, the difference is equal to the current volume, indicating that both long and short positions. The original long sell closed positions, the original short buy closed positions, position reduction. More for, empty for: is the long for, short for short, if in a transaction, open and close positions are equal to the current volume of half of the volume, the volume of unchanged, it shows that the long position and the short position did not change, but only part of the position in the long between the short or between the transfer, combined with the internal and external disk state, we define the state of the transaction for the foreign exchange of more than the state of the internal market for the short for the exchange of hands. More than flat, empty flat: is the short of long closed, short closed, long closed refers to the reduction of positions, but the reduction in the absolute value of the position is less than the current amount, and for the active selling; short closed refers to the reduction of positions, but the reduction in the absolute value of the position is less than the current amount, and for the active buying. For example: assuming that three people as a counterparty, in which A has a long position of 5 hands, B has a short position of 5 hands, C has no position; if A wants to close part of the position, it is hanging out to sell to close the position of 3 hands, C that the market will fall, it is hanging out to sell to open the position of 2 hands, at this time B also want to close the position, it is the current price (selling price) to buy to close the position of 5 hands to close the deal, the disk will show: empty flat (short closed), the current hand! Volume of 10 lots, the position difference of -6. If it is a long position is to put B as the initiative to hang out the closing order, A then close the position can be. Futures discount and futures water: in a particular place and a particular time, a particular commodity futures prices higher than the spot price is called futures water; futures prices lower than the spot price is called futures discount. Positive market: under normal circumstances, the futures price is higher than the spot price. Reverse market: in special circumstances, the futures price is lower than the spot price. Chopping: In the transaction, the position held with the price trend in the opposite direction, in order to prevent excessive losses and take measures to close the position. Summarization of Transactions : The process by which the computerized trading system of a futures exchange matches the trading orders of both parties to a transaction. Mandatory position reduction: It means that the exchange will be declared on the day with the up and down stop price of the unfilled position closure orders, with the day's up and down stop price and the contract net position profit customers (or non-brokerage members) according to the proportion of the position of the automatic aggregation of the transaction.
Edit this section of the futures contract
Main features
A. Futures contracts of commodity varieties, quantities, quality, grade, delivery time, delivery location and other terms are established and standardized, the only variable is the price. The standards for futures contracts are usually designed by futures exchanges and approved for listing by state regulatory agencies. B. Futures contracts are transacted under the organization of futures exchanges and are legally binding, while prices are generated through open bidding in the trading halls of the exchanges; most of the foreign countries use the open outcry method, while all of our countries use computerized trading. C. The fulfillment of futures contracts is guaranteed by the exchange, and private trading is not allowed. D. Futures contracts can be fulfilled or discharged by delivering the spot or conducting hedging transactions.
Components
A. Trading varieties B. Trading quantities and units C. Minimum change price, the offer must be an integral multiple of the minimum change price D. Maximum daily price fluctuation limit, i.e., the stopping point. When the market price rises to the maximum increase, we call the "stop", and vice versa, called "stop". E. Contract month F. Trading hours G. Last trading day: the last trading day refers to a futures contract in the contract delivery month for trading on the last trading day H. Delivery time: refers to the contract provides for physical delivery of time I. Delivery standards and levels J. Delivery location K. Margin L. Transaction fees
Contract content
Contract name, unit of trading, Quotation unit, the minimum change in price, the maximum daily price fluctuation limit, delivery month, trading hours, the last trading day, delivery date, delivery grade, delivery location, the minimum trading margin, transaction fees, delivery method, trading code, and so on. Annexes to futures contracts and futures contracts have the same legal effect.
Terms and conditions of futures contracts
Minimum price change: the minimum value of the price change of the futures contract unit. Maximum Daily Price Fluctuation Limit: (also known as the up and down stop) means that the trading price of a futures contract in a trading day shall not be higher or lower than the specified range of increase or decrease, exceeding which the offer will be considered invalid and cannot be traded. Futures contract delivery month: refers to the contract for delivery of the month. Last trading day: refers to a futures contract in the contract delivery month for trading on the last trading day. Futures contract trading unit "lot": futures trading must be "a lot" of integer multiples, the number of commodities per lot of contracts of different trading varieties, the varieties of futures contracts in the specified. Futures contract trading price: the futures contract is the benchmark delivery of goods in the benchmark delivery warehouse delivery price including value-added tax. The contract trading price includes the opening price, closing price, settlement price and so on. The buyer of a futures contract, if the contract will be held to maturity, then he is obliged to buy futures contracts corresponding to the underlying; and futures contracts, if the seller of futures contracts, if the contract will be held to maturity, then he is obliged to sell futures contracts corresponding to the underlying (some futures contracts in the expiration of the physical delivery but the settlement of the difference in price, for example, the expiration of stock index futures is in accordance with the average of the spot index of an average of the futures contracts for the final settlement of the open positions). (For example, the expiration of stock index futures is based on a certain average of the spot index for the final settlement of open futures contracts.) Of course traders of futures contracts also have the option of offsetting this obligation by making a reverse sale or purchase prior to the expiration of the contract.
Contract Role
One is to attract hedgers to use the futures market to buy and sell contracts to lock in costs and avoid possible losses due to the risk of volatility of commodity prices in the spot market. The second is to attract speculators to risky investment transactions, increasing market liquidity.
Editing the role of futures
Futures trading is developed on the basis of spot trading, through the purchase and sale of standardized futures contracts on futures exchanges and an organized form of trading. If people who invest in futures are categorized, they can be roughly divided into two groups - hedgers and speculators. Hedging is the preservation of the value of the spot. Bullish buy (i.e., long), sell futures in the bearish
out (i.e., short), simply put, that is, in the spot market to buy (or sell) commodities at the same time, in the futures market to sell (or buy) the same amount of the same kind of commodities, and then no matter how the price of the spot supply market fluctuations, and ultimately can be achieved in a loss in one market at the same time in the other market profitability of the results, and The loss is roughly equal to the profit, thus achieving risk aversion. Speculators, on the other hand, have the ultimate goal of obtaining a spread, and their gains come directly from the spread. Speculators based on their own judgment of the trend of futures prices, to make the decision to buy or sell, if this judgment and the market price trend is the same, then the speculator closed out of the speculative profit can be obtained; if the judgment and the price trend of the opposite, then the speculator closed out of the speculative losses borne by the speculator. Speculators take the initiative to bear the risk, his appearance promotes the liquidity of the market, to ensure the realization of the price discovery function; for the market, the emergence of speculators to alleviate the market price may produce excessive fluctuations. In futures trading hedgers and speculators are indispensable! The speculator provides the risk capital needed by the hedger. The speculator uses his funds to participate in futures trading and assumes the price risk that the hedger wishes to pass on. The participation of speculators makes the pace of price changes in the relevant markets or commodities converge and increases the volume of market transactions, thereby increasing market liquidity and facilitating hedgers to hedge their contracts and enter and exit the market freely. The emergence of futures allows investors to find a relatively effective channel to avoid market price risk, helping to stabilize the national economy, but also help the establishment and improvement of the market economic system!
Edit this section of futures trading
Categorization
Commodity futures and financial futures. Commodity futures are subdivided into industrial commodities (which can be subdivided into metal commodities (precious and non-precious metal commodities), energy commodities), agricultural commodities, other commodities, and so on. Financial futures are mainly traditional financial commodities (instruments) such as stock indexes, interest rates, exchange rates, etc., various types of futures trading including options trading. Commodity futures Agricultural commodity futures: such as cotton, soybean, wheat, corn, sugar, coffee, pork belly, canola oil, palm oil. Metal futures: copper, aluminum, tin, lead, zinc, nickel, gold, silver. Energy futures: e.g. crude oil, gasoline, fuel oil. Emerging varieties include temperature, CO2 emission allowances, natural rubber. Financial futures Equity index futures: such as the UK FTSE, German DAX, Tokyo Nikkei Average, Hong Kong Hang Seng, CSI 300 Interest rate futures Foreign exchange futures
Characteristics
The object of futures trading is a standardized contract. Futures contracts are standardized, legally binding and stipulated for delivery and settlement of a commodity or financial asset at a specific time and place in the future, developed by a futures exchange for trading on the exchange. Futures trading is a form of standardized trading. Standardization refers to the fact that all terms of a futures contract, except the contract price, are pre-specified during the futures trading process. Futures trading is a two-way trading system, long and short. Futures trading is a T+0 trading system. Futures trading is a kind of margin trading. Futures trading implements a day-by-day market-following, daily debt-free settlement system. It means that at the end of daily trading, the exchange settles the profit and loss of all contracts, trading margins and fees, taxes and other expenses according to the settlement price of the day, and implements a net one-time transfer of receivables and payables, and correspondingly increases or decreases the member's settlement reserve. Futures brokers settle their clients according to the settlement results of the futures exchange and notify their clients of the settlement results in a timely manner. The implementation of the futures market margin system and day-by-day market surveillance, daily debt-free settlement system is a unique system to control market risk. 1, two-way futures trading: futures trading and the stock market, one of the biggest difference is that futures can be two-way trading, futures can buy short can also sell short. Price, and short can also make money, so that futures no bear market. In a bear market, the stock market will be depressed and the futures market is still the scenery, the opportunity is still 2, low cost of futures trading: the futures trading country does not levy stamp duty and other taxes, the only cost is the transaction fee. The three domestic exchanges are currently in the handling of two-thirds of a million, three or so, plus the brokerage company's additional costs, unilateral fees are also less than one-thousandth of the transaction amount. Low cost is a guarantee of success 3, the leverage of futures trading: the principle of leverage is the charm of futures investment. Futures market transactions do not need to pay all the funds, the current domestic futures trading can be circulated, its insurance premiums should be based on trading commodities or futures contracts market price changes and changes. In futures trading, buyers and sellers (f) the role and effect of hedging different futures hedging is not on the futures but on the underlying financial instruments of the futures contract in kind (spot) for hedging, due to the direction of the movement of the futures and spot prices will ultimately converge, so hedging can be received to protect the spot price and the effect of the marginal profit. Options can also hedge, for the buyer, even if the abandonment of performance, but also only the loss of insurance premiums, the value of its purchase of funds; for the seller, either at the original price of the sale of goods, or to get the premiums have also preserved the value of the same. Operation of domestic no futures options, you can refer to the warrant, he is a simple stock options. The operation of futures is like the current domestic 3 trading more than a variety of the same, the world's various exchanges trading rules are not exactly the same, but the principle is the same, you have to look at what you do what kind of variety, and then specifically to learn the rules of this trading house.
Futures and now