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Risk Of Steel Futures Should Not Be Ignored

2009/2/25 0:00:00 37

Some steel trade enterprises and investors who have never set foot in futures generally have a common sense of risk awareness, and there is misunderstanding about the "threshold" and "hedging" function of steel futures trading, which should be vigilant.

Last week, market concerns and rebar futures contracts and rules were unveiled.

The birth of this new variety has attracted the attention of tens of thousands of steel traders and investors all over the country. Many enterprises are eager to get profits from it.

According to the draft of the Shanghai futures exchange's wire rod and rebar contract, the trading units of the above two contracts are 10 tons. According to the current market price, the total contract price of the 10 tons of steel is less than 40 thousand yuan.

There are market participants who account for this. If the Futures Company receives the margin of 10%-15%, the minimum threshold for investors to deal with steel futures is 4000-6000 yuan.

Some Futures Company even use this as a "bait" to publicize, so as to achieve the purpose of attracting customers.

This is obviously wrong, and it is also inconsistent with reality.

Zhai Xu, director of the steel futures research center, pointed out that compared with spot trading, futures risk is determined by the characteristics of margin trading.

Although there is theoretically a minimum trading margin, the so-called threshold, but in actual pactions, investors will not take this as the bottom line, at least prepare several times higher than the "threshold" margin to participate in the paction.

Moreover, the characteristics of futures leverage pactions determine that risks are infinitely enlarged. Therefore, for investors who have no experience in futures trading, they must not use "threshold" as the criteria for entering the market.

At the same time, the Shanghai Stock Exchange implements the "daily no debt settlement system", that is to say, every paction day after the closing day, it has to settle accounts. If there is a loss, it must make up the margin before opening the day, otherwise it will be forced to liquidate the warehouse.

If entering the delivery month, the delivery unit of the steel futures contract is 300 tons, and the customer's position will be adjusted to 300 tonnes. If the delivery is due, the amount of 4000 yuan per ton will be 1 million 200 thousand yuan.

According to one researcher, the smallest trading unit in the electronic market is 5 tons, while the steel futures trading unit in the opinion list is 10 tons, and the delivery unit is 300 tons.

"According to our experience, in most cases, small traders can not reach 300 tons of deliveries, and they need to close their positions promptly before the arrival of the delivery month".

Experts also said that futures, as a risk management tool for enterprises, has the characteristics of "double-edged sword". On the one hand, futures can be used to avoid risks, but on the other hand, it will accumulate and enlarge risks.

How to make proper use of futures hedging and price discovery functions, make reasonable production arrangements, sales adjustments and procurement strategies, grasp market trends, guide spot operations and evade market risks has become an urgent matter.

Editor in chief: Xu Qiyun

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