Hog futures are futures trading in which the goods are pork!

Futures trading is a trading method in which investors buy and sell standardized contracts of various commodities in the futures exchange after paying a margin of 5-10%. Ordinary investors can make profits by buying low and selling high or selling high and buying low. Spot companies can also use futures for hedging to reduce corporate operational risks. Futures traders generally buy and sell futures contracts through futures brokerage companies. In addition, the obligations that must be assumed after buying and selling the contract can be released through reverse trading behavior (hedging or liquidation) before the contract expires.

Futures trading developed from forward contract trading in spot trading in order to avoid risks. In forward contract transactions, traders gather at commodity trading venues to exchange market conditions, find trading partners, and sign forward contracts through auctions or negotiation between both parties. When the contract expires, both parties to the transaction settle their obligations with physical delivery. Traders find in frequent forward contract transactions that due to price, interest rate or exchange rate fluctuations, the contract itself has a spread or interest difference, so it is possible to make profits by buying and selling contracts without waiting for physical delivery. To adapt to the development of this business, futures trading came into being.

Characteristics of futures trading

1. Use small things to make big things happen. In futures trading, you only need to pay a performance deposit of 5-10% to complete several or even dozens of times of contract transactions. Due to the leverage effect of the futures trading margin system, it has the characteristics of "using small to gain big". Traders can use a small amount of funds to conduct large purchases and sales, saving a large amount of working capital.

2. Two-way transaction. In the futures market, you can buy first and then sell, or you can sell first and then buy. The investment method is flexible.

3. Don’t worry about fulfillment. All futures transactions are settled through a futures exchange, and the exchange becomes the counterparty to any buyer or seller, guaranteeing each transaction. Therefore, traders do not have to worry about the performance of the transaction

4. Market transparency. Transaction information is fully disclosed, and transactions are conducted through open bidding, allowing traders to compete openly on equal terms.

5. Well organized and efficient. Futures trading is a standardized transaction with fixed trading procedures and rules, link by link, and efficient operation. A transaction can usually be completed within a few seconds.