MFG Guide

The difference between futures trading and spot trading

The difference between futures trading and spot trading
Spot transaction refers to a transaction method in which the buyer and seller perform the obligation of delivery and payment immediately after the transaction. It differs from futures trading in that the variety, quality, and quantity of commodities are not standardized. Futures trading refers to the trading behavior of a contract concluded on an exchange, bound by law, and stipulating the delivery of a specific commodity at a specific place and time in the future. Futures contracts are standardized, and there are uniform regulations on the grade, quantity, delivery date, and delivery location of the commodity.
Spot Trading
Futures trading
Spot transaction
Forward contract
Purpose of transaction
Get in kind
Obtain the physical object, or transfer the contract for profit
Transfer price risk, or make risky investment
Trading partners
Goods in kind
Non-standard contract
Standardized contract
means of transaction
Bargaining
Auction or mutual negotiation
Open bidding on the futures exchange
Performance issues
do not worry
Worry
do not worry
transfer
Can not
Endorsement method, inconvenient
Hedging method is very convenient
Payment
100% of transaction volume
Deposit, 20-30% of the transaction amount
Margin, accounting for 5-15% of the transaction volume
Trading places
Unlimited
Unlimited
Futures exchange
Physical delivery
Pay with one hand, deliver with one hand
Determine the price and delivery method now, and deliver in the future
Physical delivery only accounts for 1-2%, with fixed

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