First, lock in the expected profit through hedging operation.
The fluctuation of commodity prices, the supply side or demand side of commodities brings operational uncertainty, which affects the operating profit of spot production enterprises or traders. Traders in the spot exchange can avoid the operational uncertainty caused by the fluctuation of commodity prices and obtain normal commercial profits through the hedging operation of the exchange. 1, buy hedging operation
With the rise of commodity prices, processing enterprises are suffering from the rise of raw material prices. The sales price of finished products with signed contracts and the future purchase price of raw materials often appear upside down, resulting in operating losses. At this time, enterprises can buy in the spot exchange for hedging operations. For example, after a production enterprise signs a sales contract, it buys an electronic contract of goods on the spot exchange to lock in the cost of raw materials. When commodity prices rise today, you can apply for physical delivery on the spot exchange, or you can hedge by transferring electronic contracts and buy the spot from other spot vendors. The procurement cost is still fixed at the original level and the expected profit is obtained.
2. Selling hedging operation
Commodity prices are in a downward trend, and commodity suppliers suffer from the decline in product sales prices. It often happens that the contract raw materials and future market sales prices are upside down, which will bring operating losses. At this time, enterprises can sell hedging operations in the spot exchange. For example, after a commodity dealer signs a contract to import raw materials from abroad, he conducts spot transactions.
The electronic contract of the sold goods locks the selling price of the goods. Today, if the commodity price falls, you can apply for physical delivery in the spot exchange, or you can hedge by transferring electronic contracts and sell the goods to other demanders. The selling price is still fixed at the original level and the expected profit is obtained.
Second, grasp the changing trend of commodity prices and make profits by buying and selling electronic contracts on the exchange.
Traders can rely on their own accurate grasp of the changing trend of commodity prices listed on the exchange, first conclude spot electronic contracts, and then make profits by transferring electronic contracts after commodity prices rise or fall in the future. 3, judge the commodity price drop (sell)
When a trader judges that the price of a commodity listed on the spot exchange will fall in the future, he first sells the electronic contract of the commodity on the exchange at a relatively high price at present, and buys the same number of electronic contracts of the commodity at a relatively low price after the price of the commodity falls for a period of time, so as to hedge the electronic contracts sold before, thus obtaining the profits brought by the price change of the commodity.
4. Judge the price increase (buy)
A trader judges that the price of a commodity listed on the spot exchange will rise in the future. First of all, he buys electronic contracts for goods on the exchange at the current low price. After the price of a commodity rises for a period of time, traders sell the same number of electronic contracts of the commodity at a relatively high price to hedge the electronic contracts they bought before, so as to obtain the profits brought by the price changes of the commodity.
Third, declare profits through physical delivery.
Traders can flexibly use the daily physical delivery declaration system of the spot exchange to obtain reasonable delay compensation fees. 5. Commodity production enterprises obtain reasonable delay compensation by declaring physical delivery.
Commodity production enterprises can get delay compensation when they declare physical delivery and the number of orders sold cannot be delivered in full.
6, commodity demand enterprises through physical delivery declaration to obtain reasonable delay compensation.
Fourthly, through arbitrage operation, we can obtain stable profits at low risk.
The price difference of bulk commodities in different varieties and markets will remain reasonable (considering freight, insurance, storage fees, capital interest, risk status, liquidity, etc.). When the commodity price deviates from the normal level, traders can obtain stable profits by buying low and selling high, while locking in risks. 7. Cross-domestic market arbitrage
The same commodity is listed in different domestic markets. Generally, the prices of commodities in different markets are basically the same or there is a reasonable price difference. When the price difference of the same commodity in different markets deviates from the normal level, traders can buy and sell separately in two markets at the same time. After a period of time, when the spread narrows, traders will carry out the reverse operation of selling and buying in two markets respectively to achieve the purpose of arbitrage. 8. Cross-international market arbitrage
Due to the exchange rate, time difference and short-term supply and demand distortion in different markets, when the price difference of the same commodity in different international markets deviates from the normal level, traders can buy and sell in two markets at the same time. After a period of time, when the spread narrows, traders will carry out the reverse operation of selling and buying in two markets respectively to achieve the purpose of arbitrage. 9. Cross-variety arbitrage
Because of similar or substitutable uses, some commodities are highly correlated, and their price trends have a certain degree of correlation. The market price between them should be kept at a reasonable price difference. When the price difference between two interrelated commodities in the spot exchange deviates from the normal level, traders can buy and sell these two commodities at the same time in the exchange market. After a period of time, when the spread narrows, traders will carry out the reverse operation of selling and buying respectively to achieve the purpose of arbitrage.