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wholesale jewelry pillow boxes The purpose of the hedging period: avoid price risk.
The basic economic functions of the futures market are the management mechanism of providing price risks. In order to avoid price risks, the most commonly used method is to preserve the duration. The basic purpose of futures transactions is to transfer the risk of producers and users to speculators (futures dealers). When spot vendors use the futures market to offset the reverse exercise of prices in the spot market, this process is called setting period preservation.
has also translated "hedge transactions". Its basic approach is to buy or sell the equivalent number of transactions with the spot market, but the product futures contract with the opposite position of the transaction, in order to use the same futures contract to sell or buy the same futures contract, settle the position, settle the futures futures, clear the futures futures The profit or loss brought by the transaction is used to compensate or offset the actual price risk or interest brought by the change in the price of the spot market, so that the economic benefits of traders stabilize at a certain level.
In from the entire process of production, processing, storage to sales, commodity prices have always fluctuated, and the trend of changes is difficult to predict. Therefore, due to the price of commodity production and circulation process The risk brought by fluctuations. Therefore, no matter which one -link economic activity participants are, setting value preservation is a method that can effectively protect its own economic interests.
The basic principle of price risk to avoid price risk is:
First, the price of the period in the future of the futures transaction will not be completely consistent , But the trend of changes is basically the same. That is, when the spot price of specific products tends to rise, the futures price will also rise, and vice versa. This is because although the futures market and the spot market are different markets that separate their own separation, for specific products, its futures prices are the same as the main factors of the spot price. In this way, the rise and fall of the spot market price will also affect the rise and fall of the futures market price. The hedging person can achieve the function of value preservation by doing the opposite of the spot market in the futures market, so that the price stabilizes at a target level.
Secondly, the spot price and futures price not only change the same trend, but also, when the contract period expires, the two will be roughly equal or united. This is because the futures price is usually higher than the spot price. In the futures price, it contains all the costs stored in this product until the delivery date. When the contract is close to the delivery day, these expenses will gradually decrease or even disappear. The decisive factor of the price is almost the same. This is the principle of market trends in the futures market and the spot market.
of course, the futures market is different from the independent market that is different from the spot market. Coupled with the specified trading units in the futures market, the number of two market operations is often incomparable, which means that the hedging person may obtain additional profits or losses during the sales profit and loss, so that his transaction behavior still still makes his trading behavior still still It has certain risks. Therefore, it is not a one -and -for example.
kabbalah jewelry wholesale Although the hedging transaction and hedging transactions are the same as possible to avoid risks, they are still very different.
First of all, the hedging target is a mid -range contract for the spot. It is clearly certain. This can be seen in the medium -aged spot contract. Period and wait. The object of hedge is the future spot price. It has clear uncertainty, but because the direction of the changes in the current and current prices is the same, it can also avoid risks.
Secondly, from the perspective of the effect of avoiding risks, the hedge effect is far from comparable to the value preservation effect. We know that the spot price = futures price base difference, that is, the basis difference is not calculated when the spot price is not determined. Because of this, there is at least one uncertainty at the hedging transaction, that is, the basis of the basis; the hedging transaction has two uncertainty. In addition to the spot price, there is a basis.
It because hedging transactions cannot solve the price of spot, it is difficult to attract the participation of manufacturers and trading units.
spoon jewelry wholesale This is the original role of futures. You can check the futures related information. No, I don't write much.