Introduction of futures knowledge

Introduction to futures, we must first understand what futures are and various technical terms in futures:

1, what is futures:

Futures, whose English name is futures, is completely different from spot. Spot is actually a tradable commodity. Futures are mainly not commodities, but standardized tradable contracts based on some popular products such as cotton, soybeans and oil and financial assets such as stocks and bonds. Therefore, the subject matter can be commodities (such as gold, crude oil and agricultural products) or financial instruments.

The delivery date of futures can be one week later, one month later, three months later or even one year later.

A 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.

2. Technical terms:

Common nouns-comprehensive part

Futures Exchange: refers to a legal person established in accordance with the conditions stipulated in the Regulations on the Administration of Futures Trading and the Measures for the Administration of Futures Exchanges, performing the functions stipulated in the Regulations on the Administration of Futures Trading and the Measures for the Administration of Futures Exchanges, and implementing self-discipline management in accordance with its articles of association.

Exchange member: refers to an enterprise legal person engaged in futures trading on the exchange upon examination and approval of the exchange according to the relevant laws and regulations on futures trading and the relevant provisions of the articles of association of the exchange.

Futures trading: refers to the trading activities of buying and selling futures contracts on futures exchanges.

Futures contract: refers to the standardized contract made by the exchange to deliver a certain quantity and quality of goods at a specific time and place in the future.

Trading hall: it is the place where futures contracts are traded centrally.

Trading seat: it is a channel for members to input trading instructions into the computer trading system of the exchange to participate in trading.

Market representative: a person appointed by a member, who accepts the trading instructions of the member in the trading hall and conducts futures trading on behalf of the member. Members are responsible for the transactions related behaviors in the trading hall.

Settler: the person authorized by the member unit to handle the settlement and delivery business on behalf of the member.

Remote trading: refers to a trading method in which members directly input trading instructions and participate in exchange trading through the communication system networked with the computer trading system of the exchange in their business places.

Hedging refers to buying or selling a certain number of spot commodities in the spot market, and at the same time selling or buying futures commodities of the same variety and quantity in the opposite direction in the futures market, so as to make up for the losses in another market with the profits in one market, thus avoiding the risk of price fluctuations.

Basis: refers to the price difference between the spot price of a specific commodity at a specific time and place and a specific futures contract of the same commodity.

Hedging position approval system: The Exchange examines the business scope of the hedging applicant, the operating performance data of previous years, spot purchase and sale contracts and other materials that can show its spot operation, and determines its hedging amount.

Futures inspection: refers to the exchange's supervision and inspection of the business activities of members, customers, designated delivery warehouses and related participants in the futures market according to various rules and regulations of the exchange.

Real-time information: refers to the market information that is basically synchronous and continuous with the market displayed by the centralized exchange, that is, real-time market information.

Daily information: refers to the futures trading information released after each trading day.

Insider information refers to undisclosed information that may have a significant impact on the futures market price, including: policies formulated by China Securities Regulatory Commission and other relevant departments that may have a significant impact on futures trading prices, decisions made by futures exchanges that may have a significant impact on futures trading prices, funds and trading trends of members and customers of futures exchanges, and other important information that has a significant impact on futures trading prices as determined by China Securities Regulatory Commission.

Insider: refers to those who have access to or access to insider information because of their management, supervision or professional positions, or perform their duties as employees or professional consultants, including senior managers such as the chairman, vice chairman, general manager and deputy general manager of the futures exchange, other employees who have access to insider information because of their positions, staff of the China Securities Regulatory Commission and other relevant departments, and other personnel specified by the China Securities Regulatory Commission.

Common nouns-exchange part

Position: a market agreement, that is, the number of futures contracts bought or sold without hedging. For buyers, it is said to be bulls; For the seller, it is called an empty position.

Short selling: putting down prices and selling futures contracts are called short selling.

Futures discount and futures premium: in a specific place and within a specific time, the futures price of a specific commodity is higher than the spot price, which is called futures premium; The futures price is lower than the spot price, which is called futures discount.

Forward market: Under normal circumstances, the futures price is higher than the spot price.

Reverse market: under special circumstances, the futures price is lower than the spot price.

Position: A contract held by a trader is called a position.

Position reduction: in a transaction, the position held is opposite to the price trend, and the liquidation measures are taken to prevent excessive losses.

Bull market: a market with rising prices.

Bear market: a market with falling prices.

Option: refers to the right to buy or sell a specific commodity or contract at a specified price for a limited time.

Open position: refers to the behavior of futures traders buying or selling futures contracts.

Liquidation: refers to the behavior of futures traders to buy or sell futures contracts with the same variety, quantity and delivery month but with opposite trading directions, and to liquidate futures transactions.

Open position: refers to the number of open positions held by futures traders.

Position limit: refers to the maximum position held by a futures exchange for futures traders.

Matchmaking: refers to the process that the computer trading system of the futures exchange matches the trading orders of both parties.

Minimum fluctuation price: refers to the minimum fluctuation range of the unit price of futures contracts.

Maximum fluctuation range limit of daily price: refers to that the trading price of futures contracts in a trading day shall not be higher or lower than the specified fluctuation range, and the quotation exceeding this fluctuation range will be considered invalid and cannot be traded.

Delivery month of futures contract: refers to the month when physical delivery is stipulated in the futures contract.

Last trading day: refers to the last trading day when a futures contract is traded in the contract delivery month.

The transaction price of a futures contract refers to the value-added tax-included price of the delivery standard of the futures contract delivered in the benchmark delivery warehouse.

Opening price: refers to the transaction price generated by call auction within five minutes before the opening of a futures contract. If there is no transaction price in call auction, the opening price is the first transaction price after call auction.

Closing price: refers to the final transaction price of the futures contract on that day.

Settlement price of the day: refers to the weighted average price of the transaction price of the futures contract on the day according to the volume. If there is no transaction price on that day, the settlement price of the previous trading day shall be the settlement price of that day.

Price limit: when a futures contract only has a buy (sell) declaration with a stop-loss price and no sell (buy) declaration with a stop-loss price within 5 minutes before the closing of a trading day, or it closes its position as soon as it has a sell (buy) declaration, but the stop-loss price has not been opened.

Transaction price: The computer automatic matching system of the exchange sorts the transaction declarations according to the principle of price priority and time priority, and automatically matches the transaction when the buying price is greater than or equal to the selling price. The matching transaction price is equal to the middle value of the buying price (bp), selling price (sp) and the previous transaction price (cp). Namely:

When bp≥sp≥cp, the latest transaction price =sp.

Bp≥cp≥sp, then: the latest transaction price =cp.

Cp≥bp≥sp, then: the latest transaction price =bp.

Highest price: Highest price refers to the highest transaction price of a futures contract in a certain period.

Lowest price: Lowest price refers to the lowest transaction price of a futures contract within a certain period of time.

Latest price: The latest price refers to the real-time transaction price of a futures contract on a certain trading day.

Price fluctuation: refers to the difference between the latest price of a futures contract in a trading day and the settlement price of the previous trading day.

Maximum bid price: the maximum bid price refers to the immediate highest price applied by the buyer on the day of the futures contract.

Minimum selling price: the minimum selling price refers to the immediate lowest price that the seller applies for selling on the day of the futures contract.

Number of applications: The number of applications refers to the number of orders placed at the highest price that have not been transacted in the trading system of the exchange on the day of the futures contract.

Declare for sale: refers to the number of futures contracts placed and sold at the lowest price in the exchange trading system on the same day.

Volume: Volume refers to the bilateral quantity of all contracts concluded in a certain contract trading period.

Open position: Open position refers to twice as many open positions as futures traders hold.

Opening call auction: It shall be conducted within 5 minutes before the opening of a contract in a certain month of each trading day, in which the first 4 minutes are the declaration time of futures contract orders, and the next 1 minute is the call auction matching time.

Call auction's principle of maximum turnover: that is, the maximum turnover can be obtained at this price. All the buying declarations higher than the price generated by call auction are sold; All sales declarations below the price generated in call auction were sold; For the purchase or sale declaration with the same price as that generated in call auction, the transaction shall be made according to the quantity of the purchase declaration and the quantity of the sale declaration, and according to the quantity declared by the minority party. If multiple prices meet the principle of maximum transaction, the opening price is the price closest to the settlement price of the previous trading day.

Benchmark price of new listing contract: determined by the exchange and announced in advance. The benchmark price is the basis for determining the trading limit of the first day of the new listed contract.

Trading code: refers to the special code compiled by members according to these rules for customers to conduct futures trading.

Forced lightening: refers to the exchange automatically matching the open position declared by the daily daily daily limit price with the profitable customers (non-futures company members, the same below) who have net positions in the contract according to the position ratio.

Profit and loss of contract unit net position: refers to the profit and loss of contract unit net position calculated by the customer according to the difference between the average position price in the direction of its net position and the settlement price of the day.

Average position price in the direction of net position: refers to the actual transaction price of all positions in the direction of contract net position weighted by volume.

Risk warning system: When the Exchange deems it necessary, it may take one or more measures, such as asking for reports, talking reminders, and issuing risk warning letters, separately or simultaneously, to warn and resolve risks.

Compulsory liquidation system: The Exchange will take compulsory liquidation measures against members who violate the rules by exceeding their positions or failing to add trading margin in time as required, as well as other violations.

Large-sum declaration system: when the speculative position of a member or investor in a certain position contract reaches 80% of the maximum position limit set by the exchange, the member or investor shall declare his capital and position to the exchange, and the investor shall declare it through the brokerage member.

Common nouns-delivery part

Physical delivery: refers to the process that when a futures contract expires, according to the rules and procedures of the exchange, both parties to the transaction end the open contract by transferring the ownership of the goods contained in the futures contract.

Centralized delivery: that is, the seller's standard warehouse receipt and the buyer's payment are all submitted to the exchange, and the exchange will handle the delivery matters centrally and uniformly.

Futures to spot: It means that both parties holding the contract reach a spot trading agreement through negotiation within the same delivery month, and settle their future positions at the agreed price, and at the same time make a considerable amount of payment and physical exchange.

Rolling delivery: refers to the delivery mode in which the seller's customers with standard warehouse receipts and selling positions take the initiative to deliver the contract after the contract enters the delivery month, and the exchange organizes the two parties to complete the delivery within the specified time.

Standard warehouse receipt: it is a physical delivery certificate with the quality agreed in the contract issued by the delivery warehouse designated by the exchange according to the procedures stipulated by the exchange.

Designated delivery warehouse: the delivery place designated by the exchange for physical delivery of futures contracts.

Default delivery: during physical delivery, the seller's member fails to deliver the standard warehouse receipt in full within the specified time; The buyer's member fails to pay in full within the specified time.

Settlement price of rolling delivery trading day: the settlement price of futures contract trading day is adopted.

Settlement price of centralized delivery on the last trading day: the weighted average price of all transaction prices of futures contracts from the first trading day to the last trading day of the delivery month is adopted.

Application form for registration of standard warehouse receipt: refers to the form issued to members or customers by the exchange or the quality inspection agency entrusted by the exchange after the goods in storage have passed the inspection. Members can obtain the certificate of holding standard warehouse receipt from the exchange with this form.

Holding certificate of standard warehouse receipt: it is a valid certificate issued by the exchange representing the ownership of standard warehouse receipt, and it is a certificate for handling the delivery, transaction, transfer, deposit payment and cancellation of standard warehouse receipt at the exchange, which is protected by law.

Circulation of standard warehouse receipts: refers to the physical delivery, transaction and transfer of standard warehouse receipts outside the exchange.

Cancellation of standard warehouse receipt: refers to the process that the legal holder of standard warehouse receipt goes to the exchange to go through the formalities of withdrawing standard warehouse receipt from circulation.

Price deduction due to poor quality: the price difference between the delivered product and the standard product due to poor quality during physical delivery.

Match Date: The first day of the rolling delivery process.

Settlement date: the second trading day after the matching date (excluding the matching date) is the settlement date.

Delivery forecast: Before delivering the goods to the designated delivery warehouse, the consignor must go to the Exchange to make delivery forecast, and the Exchange will arrange the designated delivery warehouse according to the principle of "optimizing the layout and making overall arrangements".

Delivery grade: refers to the grade at which the contract object reaches the delivery standard, which is divided into benchmark and substitution.

Storage loss fee: the fee for storing the delivered goods in the delivery warehouse, including storage fee, storage loss fee and fumigation fee.

Trading of standard warehouse receipts: refers to the public trading of standard warehouse receipts by the exchange after the delivery default occurs and the observant party chooses to continue delivery.

Soybean: Soybean with yellow, yellowish brown, light brown, dark brown or other colors, generally round, oval or oblate.

Common nouns-settlement part

Margin: refers to the funds paid by traders for settlement and performance guarantee according to the prescribed standards.

Settlement: refers to the business activities of calculating and distributing the trading margin, profit and loss, handling fee, delivery money and other related funds of members according to the trading results and relevant regulations of the Exchange.

Settlement bank: refers to the bank designated by the exchange to assist the exchange in futures trading settlement.

Settlement reserve: refers to the funds prepared in advance by members in the special settlement account of the exchange for transaction settlement, which is the deposit not occupied by the contract. The minimum balance of the settlement reserve shall be determined by the exchange.

Trading deposit: refers to the funds that members guarantee the performance of the contract in the special settlement account of the exchange, which is the deposit that the contract has been occupied. When the buyer and the seller make a transaction, the exchange will collect a trading deposit according to a certain proportion of the contract value of the position.

Additional margin: when the margin required by the customer is lower than a certain amount, the part that the brokerage company requires the customer to make up is called additional margin.

Floating gains and losses: unrealized gains and losses of open positions calculated at the settlement price of the day.

Daily debt-free settlement system: also known as daily mark-to-market, refers to the exchange's settlement of all contract profits and losses, trading deposits, handling fees, taxes and other expenses at the settlement price of the day after daily trading, and the one-time transfer of net accounts receivable and payable, and the corresponding increase or decrease of members' settlement reserves.

Risk reserve: refers to the funds set up by the exchange to provide financial guarantee for maintaining the normal operation of the futures market and make up for the losses caused by unforeseeable risks of the exchange.

Today's profit and loss: the profit and loss of futures contracts calculated at today's settlement price. The profit of the day is included in the member settlement reserve, and the loss of the day is deducted from the member settlement reserve.

Delivery price difference: at the time of settlement on the last trading day, the exchange will settle the positions of members in the delivery month according to the delivery settlement price, and the resulting gains and losses will be the delivery price difference.

Special settlement account: an account set up by the Exchange at various settlement banks for depositing members' deposits and related funds.

Special account for funds: an account opened by a member at a settlement bank for deposit of margin and related funds.

Warehouse receipt hedging: After the standard warehouse receipt of the seller's member is delivered to the exchange, the contract position corresponding to the delivery month will be settled after the full transaction margin is settled, and the profit and loss will be borne by the seller's member.

Limit order: refers to an order that must be executed at a limited price or better.

Revocation instruction: refers to the instruction of the investor to revoke the specified instruction.