What is the principle of futures? Is it easy to do?

Price discovery is the discovery of competitive prices. The futures market can form a relatively mature and excellent price mechanism, similar to a perfectly competitive market. It is a function and mechanism that can show the future price trend of futures market through fair bidding. This is the most important function of futures.

2. Transfer the price risk.

Futures market and spot market are affected by the same supply and demand relationship, so their prices rise and fall at the same time, and because of the existence of exchange mechanism, futures prices and spot prices converge near the delivery period of futures contracts.

3. Arbitrage function.

Futures arbitrage refers to the trading behavior of using the price difference between related markets or related contracts to trade in the opposite direction in related markets or related contracts and profit from the favorable change of price difference.

Arbitrage belongs to speculation, which can smooth out short-term small changes in market prices, make market prices more transparent, and prevent the market direction from slowly developing to extremes.