What is futures and how to trade and invest in the futures market? #5

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Futures also known as ‘expired contracts’ in English is called ‘Future’ refers to the future price movements of the most traded financial commodity category, many people who come into contact with commodities will participate in trading futures and lock the cost of raw materials to stabilize the cost of their production of commodities in a range, trading futures most people have their professional background, but time has come to the 21st century, especially the development of computer communication technology makes the flow of information faster and faster, One key is the transformation of trading from traditional phones to APP applications, as well as digital methods such as AI trading, regulatory deregulation and legal amendments that make futures available to the general public.

What is futures?

The development course of commodity futures has been roughly agricultural futures, non-metallic, precious metal futures and energy futures types, the Chicago Board of Trade (CBOT) was established in 1848, has launched corn, wheat, soybeans and other agricultural futures, followed by the London Metal Exchange (LME) was established in 1877, the initial introduction of copper, tin two non-precious metal futures, has been extended to copper, aluminum, lead, zinc, nickel, tin, aluminum alloy and other standard, as for the precious metal futures. Founded in 1933, COMEX launched gold futures in 1974 after the collapse of the Bretton Woods forest system and the volatility of gold prices. Energy futures, on the other hand, were born in 1978 as a result of the oil crisis of the 1970s, which led to sharp fluctuations in the prices of energy products such as oil. Although the development of commodity futures in Europe and the United States has a long history, only in recent years, China’s commodity futures trading volume has grown rapidly, mainly due to China’s large economic volume, commodity spot demand, derivatives corresponding to risk aversion and trading demand, coupled with China’s policy to encourage exchanges to develop in accordance with China’s domestic demand in line with the domestic economic development needs of unique products, so after 2005, the volume of China’s commodity exchanges rapidly rise, according to EuromonyTradeData commodity trading volume statistics. The Shanghai Futures Exchange and Dalian Commodity Futures Exchange overtook the CME Group in 2014.

Top futures market rankings

Global futures market rankings
Global futures market rankings
Ranking of trading volumes in the global futures market
Ranking of trading volumes in the global futures market
rankingThe name of the exchangeEnglish abbreviationVolume for the full year 2018Growth rate
1Chicago Mercantile Exchange CMECME4,844,856,88018.50%
2National Stock Exchange of India NSENSE3,790,090,14253.70%
3Brazil B3 Exchange B3B32,574,073,17842.30%
5Chicago Board of Choice Exchange CBOECBOE2,050,884,14213.30%
6European Futures Exchange EurexEurex1,951,763,08116.50%
7Nasdaq Composite NASDAQNasdaq1,894,713,04513.00%
8MOSCOW Securities Exchange MOEXMOEX1,500,375,257-5.30%
9Korea Exchange KRXKRX1,408,257,75638.70%
10Shanghai Futures Exchange SHFESHFE1,201,898,093-11.90%
11Bombay Stock Exchange BSEBSE1,032,693,32569.50%
12Dalian Commodity Exchange DCEDCE981,927,369-10.80%
13Zhengzhou Commodity Exchange ZCEZCE817,969,98239.60%
14HKEx HKEXHKEX480,966,62729.20%
15Miami International Stock Exchange MIAXMIAX421,320,50181.40%
16JAPAN EXCHANGE JPXJPX388,302,53520.40%
18Australian Securities Exchange ASXASX248,003,922-0.20%
19Istanbul Stock Exchange BISTBIST236,393,42161.80%
20India’s various commodity exchanges MCXMCX230,339,63016.00%
The world’s top 20 exchanges

Ranking of popular trading futures commodities

The contract category2017Market share in 20172016Market share in 2016Volume growth rate
Stock price index class 7,51629.80%7,11828.20%5.60%
stocks 4,75418.90%4,55818.10%4.30%
Interest rate 3,96815.70%3,51513.90%12.90%
Exchange rate 2,98411.80%3,07812.20%-3.00%
energy 2,1718.60%2,2148.80%-1.90%
Non-precious metals 1,7406.90%1,8777.40%-7.30%
agricultural products 1,3065.20%1,9327.70%-32.40%
noble metal 2791.10%3121.20%-10.60%
other 4801.90%6162.40%-22.10%
subtotal 5,97623.70%6,95127.50%-14.03%
total 25,199100.00%25,220100.00%-0.10%
The proportion of transactions in all contractual categories worldwide in 2017

Introduction to futures trading methods

Futures are spreads and profit or safe havens are generated by fluctuations between commodity prices

Take crude oil contracts, for example
Contract specification: 1000 barrels
Each beat is $10$


You hold until June crude oil futures, the price is 60 U.S. dollars due settlement date as of the price increase to 65 yuan

65-60=5 You make a profit of $5$x 1000 x $5000


You hold crude oil futures until July, when the price is $67 due and the closing price falls to $63

63-67 =4 You get a profit of $4$x 1000 s 4000 USD

How to invest in the futures market

General individual investors want to directly invest in trading specific exchange futures must be through the file-like individual investors want to directly invest in trading specific exchange futures must be through securities dealers, dealers to expose risks and assess whether customers are suitable for futures trading, and finally open an account to invest in the futures market

How to trade account opening futures

▶ prepare information for opening an account

▶Forex & Stock Broker Platforms Reviews Recommened◀

  • ID card/passport
  • Proof of address / utility bank statement, etc.
  • Bank account / savings card or credit card

how ▶ open an account

  1. Select the trading platform
    ▶Forex & Stock Broker Platforms Reviews Recommened◀
  2. Upload the file material
  3. Deposit via the bank Visa/Master card
  4. Waiting for approval
  5. Once you’ve completed your review, you can start trading stocks

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