Financial Business Knowledge Literacy 2

Yesterday read the newspaper, see "Trust companies to participate in stock index futures trading business Guidelines" formally promulgated. For the undergraduate time to learn futures knowledge is returned to the teacher, only remember is a high-risk high-yield investment.

See one of the words "the inherent business of trust companies shall not participate in stock index futures trading, and the collective trust business can hedge and arbitrage for the purpose of participating in stock index futures trading, the single trust business can hedge, arbitrage and speculation for the purpose of carrying out stock index futures trading, and the Silver Letter cooperative business as a collective Trust program management." However, the guideline also stipulates that the "Structured Collective Trust scheme" shall not participate in the trading of stock index futures. ”

Carefully examined, hedging and arbitrage two concepts.

Hedging: (hedging) Definition: A trader with the spot market, buy or sell in the futures market with the spot market, the same quantity, but in the opposite direction of the futures contract, in the future at a certain time by selling or buying this futures contract to compensate for the actual price risk caused by the change of the spot market prices.

In fact, it is a kind of venture capital behavior to evade the risk of spot trading, and it is the operation of combining spot trading with the futures market.

Principle: 1. Trading direction opposite principle;

2. The same principle of commodity category;

3. The principle of equal quantity of goods;

4. The same or similar month principle.

Example: soybean hedging case

In July, the spot price of soybeans was $2010 per tonne, a farm was more satisfied with the price, but soybeans were sold in September, so the unit feared that spot prices might fall, thereby reducing earnings. To avoid the risk of future price declines, the farm decided to trade soybean futures on the Dalian Mercantile Exchange. The trading situation is shown in the following table:

Spot Market futures market

July Soybean Price 2010 Yuan/ton sell 10 Lot September Soybean Contract: Price is 2080 yuan/ton

September sell 100 tons of soybeans: price of 1980 yuan/ton buy 10 lot September Soybean Contract: Price of 2050 yuan/ton

　　

Arbitrage result loss 30 yuan/ton profit 30 yuan/ton

Net profit of final result 100*30-100*30=0 yuan

Arbitrage:

Arbitrage (arbitrage): Refers to the simultaneous purchase and sale of two different kinds of futures contracts. Traders buy what they consider to be "cheap" contracts and sell those "high-priced" contracts, profiting from the changing relationship between the two contract prices. In arbitrage, traders pay attention to the mutual price relationship between contracts, not the absolute price level.

Arbitrage generally can be divided into three categories: cross-period arbitrage, cross-market arbitrage and cross-commodity arbitrage.