Cotton futures is a futures variety that has been launched for a long time. As early as 1870, New York launched cotton futures. What is cotton futures? After more than ten years of exploration, the cotton futures contract launched by Zheng Shangsuo in June 2004 has gradually matured, and the position and trading volume have always been very stable, Now the price of futures market is of great reference value to the cotton industry.

Now more and more cotton enterprises have participated in futures trading. As of the end of 2011, nearly 4000 cotton related enterprises have opened accounts. The hedging function and price discovery function of cotton futures have been brought into full play, avoiding operational risks for spot enterprises, ensuring the safety of enterprise funds, and enabling the industry to develop more healthily.

Since 2016, the No. 1 central document has proposed to carry out the pilot of "insurance + futures" for three consecutive years. In March 2017, the national development and Reform Commission and the Ministry of Finance jointly issued the notice on deepening the reform of cotton target price, pointing out that we should actively explore new ways of cotton subsidies, make rational use of insurance, futures and other financial instruments, and look for opportunities to carry out the pilot of "insurance + futures", It provides a powerful reference for further improving the agricultural subsidy policy.

In April 2017, the commodity exchange issued a notice to provide financial assistance and support for the construction of the 2017 cotton "insurance + futures" pilot project. A total of eight cotton pilot projects have been carried out nationwide. In 2018, Xinjiang also launched the cotton "price insurance + futures" pilot project, making the cotton industry in Xinjiang develop more healthily and stably.

According to the relevant person of the commodity futures exchange, the new way of "insurance + futures" takes the insurance company as a platform. Farmers or enterprises guarantee their own income by purchasing the agricultural product price insurance products of the insurance company, while the insurance company transfers risks by purchasing OTC option products, playing a double insurance role. Finally, Securities companies or futures risk management subsidiaries are hedged by the exchange futures market, which forms a risk dispersion chain.

The final effect is that the market helps cotton growers bear the risks of price fluctuations, and cotton farmers no longer have to worry about the economic losses caused by price fluctuations, greatly increasing the annual output of cotton.

Specific compensation amount for futures system construction = (insurance target price - average price of cotton market) × Actual cotton turnover.

What is the relationship between stocks and futures? What are the advantages of futures trading compared with stocks? What are the differences between futures and stocks? Here is a brief introduction to the relationship between stocks and futures.

To understand the relationship between futures and stocks, we want to see the difference between futures and stocks. The difference between stocks and futures lies in:.

1、 Stocks can only be traded in one direction, futures can be traded in both directions, and long and short can make money. It can be said that there will always be trading opportunities in the futures market, but it is difficult to have good trading opportunities if the stock market falls as a whole.

2、 China's stocks adopt the t+1 mechanism, that is, the stocks bought on the same day can only be sold the next day as soon as possible, while futures adopt the t+0 trading mechanism, which allows the opening and closing of positions on the same day, and there is almost no limit on the number of opening and closing positions, which can capture more trading opportunities.

3、 Stocks are traded in full amount. You can only buy as many stocks as you have money, and how to speculate in futures. Futures are margin trading. You can enlarge the transaction volume by 10-20 times. At this time, the risk and return will be amplified. For example, investors with 100000 funds can buy and sell commodity futures with a value of up to 100 futures software companies -2 million. If the corresponding commodity price fluctuates by 10%, investors can make a profit of 100% - 200%.

4、 Stocks can be held for a long time, and they are allowed to be tied up. Futures have a time limit, and positions must be closed for hedging or physical delivery before maturity. If positions are not closed at maturity or the principal loss is lower than a certain proportion of the margin, the exchange has the right to force the closing of positions.

5、 Stock investment return has two parts: stock price difference and dividend distribution, while futures trading can only profit from price difference.

6、 The yield is different. Generally, it is not easy for good stock investors to have an annual yield of more than 50%. Due to the enlarged leverage of futures, it is possible for excellent futures investors to have an annual yield of several times or even dozens of times.

7、 The number of trading varieties is different. There are thousands of stock varieties. It is difficult to analyze the difficulty of stock selection. There are only more than 50 Futures trading varieties, of which about 20 are more active, which is relatively easier to analyze, track, study and judge.

8、 For companies and enterprises, the main role of stocks is financing, that is, money. The hedging function of futures is a powerful tool to avoid price risks for production enterprises and spot traders.