Futures Market-What is a futures market?
Futures market is a place to conduct futures trading is a multi-period trading relationships. It is based on "open, fair and just" principle, in the spot market developed on the basis of the highly organized and highly regulated market of the form. Is an extension of the spot market, but also the market has a high stage of development. From the organizational structure point of view, the broad sense of the futures markets, including futures exchanges, clearing houses and clearing houses, brokerage firms and Futures traders; in the narrow sense refers only to the Futures Exchange futures market.
Futures markets are made up of four parts.
(1) the Futures Exchange;
(2) futures clearing house;
(3) futures brokerage companies;
(4) futures (including hedgers and speculators.
1. the Futures Exchange 1, the definition and nature of the Futures Exchange Futures provide a forum for futures trading, facilities, services, and trading rules of the non-profit organization. Exchanges generally adopts a membership system. Exchange's membership requirements are very strict, the exchanges have specific provisions. I must first apply for membership in exchange from the Exchange, the investigation of the credit applicant's financial situation, pass the examination, meet the requirements before approval of the Board membership. Members of the exchanges can be assigned seats in general. Exchange, the highest authority is the General Meeting. Board of Directors consists of members of the General Assembly or the Council, the general membership of the General Assembly by the elected board of directors appointed exchanges president responsible for the daily exchange administration and management.
2, the Futures Exchange's main role is to:
(1) to provide an organized and orderly market place. Ensure that futures trading in the "just, fair and open" principle running smoothly.
(2) to provide an open transaction price.
(3) to provide a unified trading rules and standards to ensure orderly trading.
(4) provide a good communication information services.
(5) to provide transaction security and compliance assurance that the transaction guarantee.
3, the exchange system: Exchange, a membership system, the exchange operations of the major decisions such areas as decided jointly by all members.
4, the Futures Exchange revenue and budget management an income comes from dues. (B) Futures Clearing Countries today the composition of the form of futures clearing houses generally have three kinds: The first one is subordinate to exchange clearing house, clearing members are also members of the exchanges; Species belong to the first exchange clearing house, but only a few members of the exchanges became a deep-pocketed by clearing members; The third is independent of the exchange clearing house in addition to become completely independent clearing houses.
Futures Clearing House function and role of the main ones are:
(1) is responsible for trading in futures contracts settlement;
(2) to undertake a security futures trading;
(3) monitoring physical delivery;
(4) publishing market information. Futures Clearing the majority of the membership system. Clearing Member must pay the full deposit deposited in the clearing house, to ensure that clearing houses in the futures market risk control. Futures Clearing the highest authority is the Board of Directors (Council). Daily work by the Executive.
(C) futures brokerage firm Futures brokerage firm (or brokers) is a proxy client to futures trading, and provide information on futures trading services to corporate legal. Futures trading in the proxy client, the charge a commission. Futures trading activities as an intermediary organization, the composition in the futures market plays an important role. On the one hand it is the exchange with a number of transactions between the bridges, widen and improve the service functions of the exchange; On the other hand, it is for the traders engaged in trading activities to provide financial guarantees to the Stock Exchange. Futures brokerage companies are generally settled within the agency set up the Department of the Ministry of deposit, credit department, orders to the Department of the Ministry of Information, the cash settlement department, research department and so on. A standardized brokerage firm should have sound risk management systems, compliance with national regulations and policies, subject to the supervision of government regulatory bodies, abide by professional ethics and safeguard the interests of industry as a whole, a sharp distinction between self and agency business, strict customer management, brokerage, quality of personnel Higher condition.
(D) futures were According to the purpose of trading in the futures division period. Basically divided into two types of people: namely, hedgers and speculators. 1 hedgers. The purpose of such a person engaging in futures trading is the use of futures market hedging transactions in order to reduce the risks of price fluctuations and ensure normal production and operating profit. Do this kind of hedging and the general production operators, traders, real users. 2, speculators also known as venture investors. Speculators to participate in futures trading and hedging purposes are the opposite, they are willing to take the risk of price fluctuations. It is intended that a small amount of funds to win more of the profits. By way of speculative futures can be said that variety and diversity, its practice more complicated than hedging. In the futures market, if there is no speculators involved, their risk aversion and price discovery function of the two can not be achieved. Involved in the transaction market, speculators increase liquidity, act as a "lubricant" role.
