What are futures opening rules?
Futures opening and closing rules, simply speaking, refer to a series of regulations followed for opening and closing positions in futures trading. Specifically, opening a position refers to buying or selling a futures contract to establish a new position; closing a position refers to buying or selling a corresponding number of futures contracts to release the original position. The rules for opening and closing positions play an extremely important role in the futures trading process and directly determine the profit and loss of traders.
Analysis of futures opening rules
Futures opening and closing rules are relatively complex, mainly including the types of opening and closing positions and the time limits for opening and closing positions. According to the difference in trading methods, futures opening rules are mainly divided into two categories: intraday settlement and overnight position holding.
For intraday settlement, traders need to open and close positions with the same number of contracts within the trading day to meet the requirements for full liquidation within the day. The income from this trading method has been settled on the same day, and some futures exchanges also have intraday trading margin systems to ensure traders' risk control.
Overnight holding means that traders will convert the positions established before the settlement date and then close the positions on the next trading day. The position conversion time is generally the closing time of the trading day. After the end of the trading day, it will be converted into the position of the next trading day. During the transaction process, holders are advised to conduct timely delivery and transaction risk management.
Detailed explanation of futures opening rules
There are two main ways to open a futures position: buying and selling. Buying and opening a position means purchasing a certain number of futures contracts at a low price by obtaining a contract, and at the same time signing a sales contract with the seller to determine the future delivery period, price, quantity, etc. To open a position by selling is to sell a certain number of contracts. This method of opening a position is also called a short position and is mostly used in bearish market predictions. In contrast, opening a long position can lead to higher profits, while opening a short position can lead to higher profits when the market falls.
Regardless of the method of opening a position, traders need to follow the prescribed delivery period for opening a position. If the delivery period is exceeded, the position must be closed. If the position is not closed, an extension fee must be paid. There are also some futures exchanges that allow traders to choose the opening period and pay the corresponding margin to avoid being frozen due to failure to close the position in time.
Detailed explanation of futures position closing rules
There are two ways to close a futures position: buying to close a position and selling to close a position. Buying to close a position means purchasing an equal amount of the original position at a higher price and canceling the original contract; selling to close a position means selling an equal amount of the original contract at a lower price and canceling the original contract. . When closing a position, traders should choose the appropriate closing time based on changes in market conditions. If the price continues to rise, the trader's selling and closing operation will generate higher profits, and vice versa. When closing a position, if all contracts held cannot be canceled, open positions will be generated and a certain extension fee will need to be paid.
Conclusion of Futures Opening Rules
Generally speaking, futures opening rules are a very important part of futures trading, which directly determines the profit and loss of traders. Accurately understanding and following Kaiping rules can better control risks and achieve profits. In addition, before conducting futures trading, traders are advised to carefully study the relevant market conditions and choose an appropriate investment strategy to avoid losses due to blind trading.
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