What is futures? What are the basic processes of futures trading?

Generally speaking, futures is a standardized paper contract, which is formulated by a futures exchange to deliver a certain number of subject matter at a specific time and place in the future. This subject matter, also known as the underlying asset, can be a commodity, such as copper or crude oil, a financial instrument, such as foreign exchange and bonds, or a financial indicator, such as three-month interbank offered rate or stock index. Therefore, futures trading is the inevitable product of the development of market economy to a certain stage.

Futures investors should have good psychological quality and risk-taking ability, strong will, strong self-discipline, be able to handle their trading business calmly and not be emotional. Futures investors should be able to calmly and calmly analyze and observe the rapidly changing price market and make reasonable decisions.

One reason why futures trading is attractive to investors is the leverage of futures trading, that is, controlling the overall value of futures contracts with relatively little funds, that is, trading with 5% to 10% of funds 100%. However, futures investors should fully realize that high returns are behind high risks. Therefore, people who step into the futures market should have a sense of taking risks and be prepared for possible losses. In addition, because the rules and practices of futures trading and securities trading have many similarities and differences with general spot trading, people who enter the futures market should also understand and master some necessary futures trading knowledge. The procedures for entering the futures market are basically the same as those for the stock market.

As far as customers are concerned, they usually handle their own futures trading business through a brokerage company (such as Tianjin Fangzheng Interim Futures Binhai New Area Sales Department). Futures investors should first open a futures trading account in the business department of Tianjin Founder Mid-term Futures Binhai New Area, sign a standardized Futures Trading Agreement, fill in the customer registration, and deposit the required deposit, so as to complete the procedures for opening a trading account.

Of course, according to the laws and regulations of futures trading, the business department of Tianjin Founder Interim Futures Binhai New Area will also require investors (that is, customers) to provide correct and detailed financial information, so that our business department can understand the financial situation and investment purpose of investors and determine whether futures are suitable for investors. Only those who meet the requirements are allowed to open accounts. At the same time, the exchange also requires member brokerage companies to supervise the normal operation of client funds. When the business department accepts an investor to open an account, the investor can start futures trading as a customer.

The general process for customers to participate in futures trading is as follows:

(1) Futures traders go through the account opening procedures in the business department of Tianjin Fangzheng Intermediate Futures Binhai New Area, including signing the power of attorney authorizing the brokerage company to buy and sell the contract and paying the handling fee. After authorization, our business department can conduct futures trading according to the terms of the contract and the customer's indicators.

(2) After receiving the customer's instruction, the broker shall immediately notify the representative of the business department of the Exchange by telephone, telex or other means.

(3) The trading representative of the Bank's business department will stamp the received order and send it to the market representative of the trading hall. (4) On-site and off-site representatives input customer instructions into the computer for trading.

(5) After each transaction is completed, the on-site and off-site representatives shall notify the off-site brokers of the transaction records and inform the customers. (6) When the customer requests to close the futures contract, it shall immediately notify the broker, who will notify the trading representative stationed in the exchange by telephone, hedge the futures contract through the on-site and off-site representatives, and at the same time liquidate it through the trading computer, and the broker will send the hedged net profit and loss statement to the customer.

(7) If the customer fails to close the position in a short time, it will generally be settled once a day or once a week according to the settlement price of the exchange on that day. If there is a loss in the book, the customer needs to temporarily make up the loss difference; If there is a book surplus, the broker will pay the profit difference to the customer. The actual profit and loss can only be settled after the customer closes the position.

The above is the basic flow of futures trading.