What is the futures high and low board?
Futures are standardized contracts that are uniformly traded by exchanges. The price of a commodity is determined by the relationship between supply and demand. High or low board is a common phenomenon in futures trading. It means that during the trading process, the price fluctuation exceeds the set maximum or minimum price, so the trading system will have a high or low board, making it difficult for the market price to continue to rise. or fall. The futures high and low boards represent the extreme state of market prices and are closely related to traders' psychological factors and financial aspects.
The impact of high and low boards
The impact of high and low boards on the futures market is significant. In a high-low market situation, traders will face greater risks because they are unable to sell or acquire contracts at predetermined prices, resulting in a natural increase in traders' risks. In this case, traders may choose to exit the market or reduce trading, and many will become wait-and-see. This is also the reason why market trading activity has been greatly reduced.
Of course, the high and low boards are also likely to attract more participants to join the market, who hope to obtain higher returns by seizing opportunities in the high and low boards. This will also lead to increased market volatility and violent price index fluctuations, limiting the fairness and rationality of the market.
Reasons for high and low boards
Hi-low boards arise for a variety of reasons. First of all, high and low boards are caused by insufficient market liquidity. When the market fluctuates violently, when buying and selling intentions are contrary or when uncertainty arises during execution, trading volume will decrease, which will lead to insufficient market liquidity. In this case, it is difficult for the market price to continue to rise or fall, so a high or low board will appear.
Another reason is the settings and rules of the trading system. When the upper and lower price limits set by the trading system cannot meet market demand, a high or low board will appear. This shows that the settings and rules of the trading system need to adapt to market needs and changes to maintain market stability and health.
The Enlightenment of the High and Low Boards to Traders
For traders, the high and low boards also bring some revelations. First of all, traders should pay attention to risk control and avoid huge losses due to the increased risks brought by the high and low boards. Secondly, traders should learn to identify the emergence and momentum of high and low boards, trade according to market demand, and adjust positions and margins in a timely manner.
Summarize
Futures high and low boards are a common phenomenon in futures trading and represent the extreme state of market prices. High and low boards can cause increased market volatility and decreased trading activity, challenging traders' risk control capabilities and trading skills. Only when traders adjust positions and margins in a timely manner according to market demand can the stability and profitability of transactions be guaranteed.
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