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The difference between steel spot and steel futures

(1) The direct objects of trading are different.

The direct object of spot trading is the steel commodity itself, with samples, physical objects, and pricing by sight. The direct object of futures trading is the combination of futures medicine, which is how many hands or how many futures contracts are bought or sold.

(2) The purpose of the transaction is different.

Spot transaction is a transaction of first-hand money and first-hand goods, and physical delivery and payment settlement are carried out immediately or within a certain period of time. The purpose of futures trading is not to obtain physical goods at maturity, but to avoid price risks or make investment profits through hedging.

(3) The transaction methods are different.

Spot trading is generally a one-to-one negotiation and signing of a contract. The specific content is negotiated by both parties. If the contract cannot be honored after signing the contract, it is necessary to resort to the law. Futures trading is conducted in an open, fair and competitive manner. Negotiate deals one-on-one

(4) The trading venues are different.

Spot transactions are generally conducted in a decentralized manner, and transactions are conducted in a decentralized manner by some steel agents, dealers, manufacturers and consumer manufacturers. However, futures trading must be openly and centrally traded on the exchange in accordance with regulations, and over-the-counter trading is not allowed

(5) The security system is different.

Spot transactions are protected by laws such as the Contract Law. If the contract is not fulfilled, it must be resolved by law or arbitration. In addition to national laws, industry and exchange rules, futures trading is mainly guaranteed by the margin system to ensure cash at maturity.

(6) The range of goods is different.

The varieties of spot transactions are all steel commodities that enter the circulation, while the varieties of futures transactions are limited. Mainly wire and thread

(7) The settlement method is different.

Spot transactions are cash-on-delivery, and no matter how long it takes, they are settled once or several times. Due to the implementation of the margin system in futures trading, profits and losses must be settled on a daily basis, and a day-to-day system is implemented.

The difference between steel spot and steel futures1 The difference between steel spot and steel futures2


Post time: Aug-02-2022