The impact of futures markets on the real economy

The function of the futures market is the concrete performance of the function of the futures market on the producers and operators and on the whole economy. In summary, this performance is reflected in the macro and micro aspects.

First, the role in the macro-economy

The role of the futures market in the macro economy is mainly reflected in the following aspects:

First, risk aversion activities in the process of production and consumption. Ease price fluctuations. The market price of a commodity tends to increase volatility by blind production and consumption, the price of the futures market to form for the expected price, truly reflects the changes in market supply and demand of future goods, production operators can use the futures market information, production or consumption in a planned way, so that you can avoid blindness, reduce the price of commodities futures market as risk aversion or the place of management, production operators through the futures market spot for hedging. The spot market reduces the force of buying and selling, thus reducing the volatility of spot prices. In this sense, futures markets are conducive to market price stability.

Second, it provides the reference and means for the government to make decisions. In the era of planned economy, the government often takes spot price as an important reference for making decisions. This kind of decision has obvious hysteresis. Use spot price to guide future production or industrial structure adjustment. It is easy to cause imbalance between supply and demand and waste of resources. Futures prices are expected, and the government takes advantage of them to make decisions in advance, which is conducive to avoiding the imbalance of supply and demand or the waste of resources in the future. Futures market can be an important means for the government to regulate and control macro-economy. The government can use futures market to express its views. Bring the market into line with the government’s regulatory objectives. Government timely intervention in the market is one of the forms.

Third, promote the international development of the economy, improve the national economic status. The futures price is the benchmark price of international trade, and the influential futures market becomes the basis for countries to allocate resources reasonably. Futures standardized contract trading provides an important condition for international trading. The use of futures market to connect domestic and international can promote the international development of domestic economy. A futures market that makes a country an international pricing center, thereby enhancing its economic status.

Fourth, it contributes to the improvement of the market economy system. Spot market and futures market are two important parts of modern market system. Futures market plays an authoritative role in pricing and risk management. Because of this important role, some people believe that futures market is the core of capital market or market economy, and the market economy system without futures market is incomplete. Futures market is conducive to the establishment and improvement of the market economic system.

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