What are futures? How to buy futures? What kinds of futures are there?

1. What are futures?　　　The so-called futures, generally refers to the futures contract, that is, the unified development of the futures exchange, the provisions of a specific time and place in the future delivery of a certain amount of the underlying standardized contract. This underlying, also called the underlying asset, to the futures contract corresponding to the spot, can be a commodity, such as copper or crude oil, can also be a financial instrument, such as foreign exchange, bonds, but also can be a financial indicator, such as three-month interbank lending rate or stock index. 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 settlement of the difference instead of physical delivery, for example, the expiration of stock index futures is based on the average of the spot index of a certain futures contract on hand to final settlement). (for example, stock index futures expiration is based on a certain average of the spot index to the futures contract on hand for final settlement). Of course, traders of futures contracts have the option of offsetting this obligation by entering into a reverse trade prior to the expiration of the contract.　　　The broader concept of futures also includes exchange-traded options contracts. Most futures exchanges list both futures and options.　　2. What are the types of futures? What are stock index futures? What are interest rate futures? What are foreign exchange futures?　　　Futures can be broadly divided into two categories, commodity futures and financial futures. The main varieties of commodity futures can be divided into agricultural futures, metal futures (including base metals and precious metals futures), energy futures three categories; financial futures can be divided into the main varieties of foreign exchange futures, interest rate futures (including medium and long-term bond futures and short-term interest rate futures) and stock index futures. The so-called stock index futures are futures with stock index as the underlying. Both parties trade on the price level of the stock index after a certain period of time, and delivery is made through cash settlement of the difference.　　　The so-called interest rate futures refers to the bond securities as the underlying futures contracts, it can avoid the bank interest rate fluctuations caused by the risk of changes in securities prices. There are many types of interest rate futures, and there are many ways to categorize them. Usually, according to the duration of the underlying contract, interest rate futures can be divided into two categories: short-term interest rate futures and long-term interest rate futures.　　　The so-called foreign exchange futures refers to the futures contract with the exchange rate as the underlying, which is used to avoid the exchange rate risk. It is the earliest variety of financial futures. At present, the main varieties of foreign exchange futures trading are: U.S. dollar, British pound, German mark, Japanese yen, Swiss franc, Canadian dollar, Australian dollar, French franc, Dutch guilder and so on. From a world perspective, the main market for foreign exchange futures is in the United States.　　 Futures Commodity futures Agricultural futures Metal futures (base metal futures, precious metal futures) Energy futures Financial futures Foreign exchange futures Interest rate futures (medium- and long-term bond futures, short-term interest rate futures) 3. What are the differences between stock index futures and stocks?　　　Stock index futures compared with stocks, there are several very distinctive features, which is particularly important to stock investors: (1), futures contracts have an expiration date, can not be held indefinitely.　　　Stocks can always be held after purchase, and the number of shares will not decrease under normal circumstances. But stock index futures have a fixed expiration date, the expiration of the license will be removed. Therefore, trading stock index futures can not be like buying and selling stocks, trading on the regardless, we must pay attention to the expiration date of the contract to decide whether to close the position in advance, or wait for the contract to expire (the good thing is that the stock index futures is a cash settlement delivery, do not need to actually deliver the stock), or the position will be transferred to the next month.　　　(2), futures contracts are margin trading, must be settled daily Stock index futures contracts are traded on margin, generally as long as you pay the contract face value of about 10-15% of the funds can buy and sell a contract, which on the one hand improves the profitability of the space, but on the other hand, it also brings the risk, and therefore must be settled daily profit and loss. After buying a stock, the book profit or loss is not settled until it is sold. But the stock index futures are different, after trading every day in accordance with the settlement price of the contract held in the hands of the settlement, book profits can be withdrawn, but book losses must be made up before the opening of the next day (i.e., additional margin). And because it is margin trading, the loss may even exceed your investment capital, which is different from stock trading.　　　 (3), futures contracts can be sold short stock index futures contracts can be very convenient to sell short, and then buy back after the price recovery. Stock financing transactions can also be sold short, but it is relatively difficult. Of course, once the price does not fall but rises after short selling, investors will face losses.　　　 (4) The liquidity of the market is high.　　　Some studies show that the liquidity of the index futures market is significantly higher than that of the stock spot market. For example, in 1991, FTSE-100 index futures trading volume has reached 85 billion pounds.　　　 (5), stock index futures cash delivery method of the futures market, although the stock market is built on the basis of the derivatives market, but the futures index delivery in the form of cash, that is, only in the delivery of profit and loss without transferring the physical, in the futures contract delivery period investors do not have to buy or throw out the corresponding stock to fulfill the contract obligations, which avoids the delivery period of the stock market, the "crowded market". The phenomenon of "crowded market".　　　 (6), in general, the stock index futures market is focused on trading based on macroeconomic information, while the spot market is focused on trading based on individual company conditions.