When learning the basic knowledge of futures, investors should first understand that the stock index futures have the characteristics of forward delivery and margin trading, so that the stock index futures have many functions such as speculative trading, hedging and hedging, and become an important investment tool indispensable in the stock market.
Stock index futures speculative trading function
Speculative trading refers to trading with the purpose of obtaining the return on the spread. The stock spot market and stock index futures market both have the function of speculative trading, but the function of speculative trading in stock index futures is more powerful. Stock index futures can be speculated not only in the process of the stock market rising, but also in the process of the stock market falling, providing investors with a new way of speculative trading, which is also the basic futures knowledge that investors need to master. As we all know, stock index futures use margin trading, clearing at face value, and successful speculative trading can increase earnings by several times. The failure of speculative trading makes the loss more than ten times the magnification, and the speculation of trading is further strengthened. Because of the leverage effect of margin trading, the multiple effect of profit becomes more attractive to speculators. The multiple effect of losses makes it possible to force short, force more, the fluctuation range of stock index increases, the space for speculative trading is further expanded, providing greater space for speculative trading.
The hedging function of stock index futures
Stock index futures carry out margin trading and can be shorted, which provides favorable conditions for hedging and preservation with lower cost and stock spot market. The hedging and hedging functions of stock index futures mainly include two aspects: one is to obtain dividends for the purpose of hedging and hedging. Many stocks have good performance and good growth, with high dividends distributed to investors each year. If the stock market is in a downward cycle and investors want to get the dividend income of the company at a low cost, they can buy the stock of the company and sell the corresponding amount of stock index futures contracts to hedge their value. When the stock market falls, the market value of the stock continues to shrink and suffers a certain loss; And the decline of the stock index and bring the corresponding short return for investors, the two offset, you can break even, on the basis of capital preservation obtain rich dividend income.
The second is to avoid risk for the purpose of hedging and preservation. When the market fell into the cycle, a larger number of stock investors hold positions in the short term can’t find a better point positions, or to hold a certain stock positions for a long time, you can sell the corresponding stock index futures contracts, to hedge the risk of the stock went down, the stock index, stock declined steeply, the value objective of investors’ money is constant.