The objectives and types of futures trading

The Objectives of futures trading
Futures trading has two purposes, one speculative profit, and second, hedging.
1. Speculation
Definition: Futures trading in the futures market for the purpose of obtaining the spread proceeds.
Specific approach: investors according to their futures price changes to judge, continue to buy or sell futures contracts, through the spread to obtain higher profits.

2. Hedging
Definition: to avoid the spot price risk as the main purpose of the futures trading behavior.
Specifically: producers, traders or consumers in the futures market to do with a spot variety, the exact same number and position the opposite of the transaction, that is in the spot market to buy (or sell) a commodity at the same time, the futures market Sell (or buy) the same kind, the same amount of commodity futures contracts to offset or limit due to price fluctuations on the spot caused by the risk. The purpose of hedging is not for profit, only hedging.
In accordance with the form of hedging, hedging can be divided into buying hedging and selling hedging two.

(B) the type of futures trading
1. According to the different futures contracts, futures trading can be divided into commodity futures trading and financial futures trading.
2. According to the different futures market participants, futures trading can be divided into futures exchanges, futures brokers, futures investors or futures traders and other different subjects.
3. Futures trading can be divided into hedging transaction and speculative transaction according to the motive and purpose of futures investors trading futures contracts

 

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Symbol Bid Ask Spread
EURUSD 1.17880 1.17900 2
GBPUSD 1.32020 1.32050 3
USDCAD 1.27820 1.27850 3
USDJPY 112.090 112.110 2
USDCHF 0.98900 0.98930 3
AUDUSD 0.75570 0.75600 3
NZDUSD 0.68060 0.68110 5
EURGBP 0.89270 0.89300 3
EURCHF 1.16600 1.16630 3
EURJPY 132.140 132.170 3
AUDJPY 84.700 84.750 5
GBPJPY 147.980 148.040 6
XAUUSD 1290.22 1290.62 40
XAGUSD 17.133 17.183 5

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