What does futures mean? What's the difference between stocks and futures?
For the current investment projects, compared with foreign exchange, futures, funds, etc., stocks are the most common and most familiar. For futures, we may be a little strange. What is futures? What is the difference between stocks and futures?
What does futures mean?
Futures is a kind of standardized tradable contract based on a certain mass product such as cotton, soybean, oil and financial assets such as stocks and bonds. But futures are not commodities.
The difference between stock and Futures
1. Transaction mode
Stock investment trading is t + 1 mode, that is to say, it can be sold on the second day after buying on the same day, which has certain liquidity. But if the intraday judgment error, can only look at the closing, but can do nothing.
Futures investment is t + 0 mode, that is, if you buy on the same day, you can sell on the same day. If you find that there is an error in intraday operation, you can close your position at any time. It can be as short as a few minutes or as long as several months. It can be traded frequently and has strong liquidity.
2. Operation mode
The stock market is one-way trading, that is to buy at a low price and sell at a high price. Only by buying up can you make money.
The futures market is a two-way trade, that is, if you are bullish, you will buy low and sell high; if you are bearish, you will sell first, and then you will buy and close the position to hedge. You can make a profit by buying up and buying down.
3. Investment amount
Stock is full margin trading, how much money to buy how many stocks, 100% of the total investment.
Futures are margin trading, which can enlarge funds by more than 10 times through leverage.
4. Market transparency
Stock market securities companies manipulate stock prices, insider trading is more, more fraud.
The transparency of the futures market is very high, and the trading volume and position status are announced to the public every day without insider trading.
The stock price is pulled up by the makers, and the amplitude is not easy to grasp.
The futures price fluctuates around the market price of various varieties. If the price deviates excessively, it will be corrected by the market, and the price is easy to grasp. The price of futures changes according to the relationship between supply and demand.
6. Trading varieties
There are a large number of stocks in the stock market, with more than 1300 varieties. It is very difficult to look at them all once, and it is even more difficult to analyze them. And the data of each stock need to be studied and matched with the index.
The futures market has less trading varieties and less information, and can be accessed on the Internet, which is convenient for analysis.
The main role of stocks is financing, which is often referred to as encircling money.
Futures are characterized by risk aversion and price discovery.
Stocks can be delisted, and share prices can also fall very low, even if you have a high level of operation, it is difficult to see which company is making false accounts. The stock risk is very high, such as the high position is locked up, the fund takes up a long time, it is not easy to prevent, and there is no transaction order to control in advance.
The risk of futures mainly comes from the participants' reasonable grasp of positions and the level of operation. The futures risk is also high, but the futures trading operation is flexible and rapid; the predetermined trading orders can be used to control the risk within a certain range.
9. Time, rate of return and period
The timeliness of stock operation is not strong, unless the listed company goes bankrupt and liquidation, it can be held for a long time. Because of the characteristics of one-way operation of stocks, investors are a little careless and have high risk of holding up, which is suitable for medium-term investment.
Because of its two-way characteristics, futures can be traded in bull market and bear market. It is suitable for short-term investment and can also be carried out in medium and long-term. It is determined by traders, and the rate of return is relatively higher than other industries.
10. Influencing factors
Due to the performance of listed companies and the artificial manipulation of large investors, that is, policy influence, ordinary investors are not easy to grasp.
Futures generally do not have insider manipulation, the market is transparent, it is mainly restricted by the supply and demand relationship, investors can grasp it at any time.
Although there are so many differences between stocks and futures, we should be cautious when investing in stocks and futures. After all, any investment has certain risks.