CSRC. In April 199.Pursuant to the State Counci Reform Plan,the SCSC and the CSRC were merged to form one ministry rank unit directly under the State Council. Both the power and the functions of the CSRC have been strengthened after the reform A centralized securities supervisory system was thus established. Regulation of the Futures In1974.Congress passed the Commodity Industry in USA Futures Trading Commission Act. 5 minutes The Commodity Futwes Trading Commission (CFTC)was established,with twe goals in mind: 1)to foster competition and 2)to protect the participants in the futures markets from fraud, deceit,and abusive practices. The National Futures Association(NFA)is a self-regulatory organization established in 1982. Anyone in the futures business who is required to register with the CFTC must also become a member ofthe NFA National Futures To assure "high standards of professional Association (nea)3 minute onduct and financial responsibility"on the part of its members. Who Is Required to Futures Commission Merchant(FCM) Register with the CFTC Introducing Broker (IB) 3 minutes Commodity Pool Operator(CPO) Commodity Trading Advisor (CTA) Associated person(AP) An AP is an individual who solicits orders, customers,or customer funds on behalf of an FCM,IB.CTA.or CPO
14 CSRC. In April 1998, pursuant to the State Council Reform Plan, the SCSC and the CSRC were merged to form one ministry rank unit directly under the State Council. Both the power and the functions of the CSRC have been strengthened after the reform. A centralized securities supervisory system was thus established. Regulation of the Futures Industry in USA 5 minutes In 1974, Congress passed the Commodity Futures Trading Commission Act. The Commodity Futures Trading Commission (CFTC) was established, with two goals in mind: 1) to foster competition and 2) to protect the participants in the futures markets from fraud, deceit, and abusive practices. The National Futures Association (NFA) is a self-regulatory organization established in 1982. Anyone in the futures business who is required to register with the CFTC must also become a member of the NFA. National Futures Association (NFA)3 minutes To assure “high standards of professional conduct and financial responsibility” on the part of its members. Who Is Required to Register with the CFTC ? 3 minutes Futures Commission Merchant (FCM) Introducing Broker (IB) Commodity Pool Operator (CPO) Commodity Trading Advisor (CTA) Associated person (AP) An AP is an individual who solicits orders, customers, or customer funds on behalf of an FCM, IB, CTA, or CPO
Protection for the The CFTC seeks to protect the public who To guard against the ndividual Investor are involved in the futures business by risk of insolvency,the 5 minutes establishing extensive regulations, maintaining effective surveillance capital requirements procedures,and rigidly enforcing the rules. and position limits on Potential abuses in the futures industry fall firms doing business into three broad categories:unfair trading in the futures practices,credit and financial risks,and sales industry. practices abuses. Sales practices are Unfair trading practices include price closely regulated and manipulation,prearranged trading and monitored. trading ahead of a custome 1.Concepts Futures contract Futures Exchange 2.Questions for Discussion Why Trade Futures? -What is Risk Transfer and Why transfer it? -Who Benefits from the Transfer of Risk? What is the primary purpose of the futures markets? Do you know how to make so many dat into information? 第四讲基本内容 教学内容(00 Minutes) Methods and Chapter 2 Beginning with th Basics (PartTwo) Plan Trading The Futures Contract These thoughts probably cross your mind: 本意开始介绍期 5 minutes If I choose to enter a contract as a buyer or aseller 货市场术语和抽 what happens if the contract expires and I have to 本内容，通过问 make good? 题的方式来解决 Where will I find all those pork bellies to deliver? 学生可能存在的 15
15 Protection for the Individual Investor 5 minutes The CFTC seeks to protect the public who are involved in the futures business by establishing extensive regulations, maintaining effective surveillance procedures, and rigidly enforcing the rules. Potential abuses in the futures industry fall into three broad categories: unfair trading practices, credit and financial risks, and sales practices abuses. Unfair trading practices include price manipulation, prearranged trading, and trading ahead of a customer. To guard against the risk of insolvency, the CFTC enforces net capital requirements and position limits on firms doing business in the futures industry. Sales practices are closely regulated and monitored. 1. Concepts – Futures contract – Futures Exchange 2. Questions for Discussion –Why Trade Futures? –What is Risk Transfer and Why transfer it? –Who Benefits from the Transfer of Risk? –What is the primary purpose of the futures markets? – Do you know how to make so many data into information? 第四讲 基本内容 教学内容 (100 Minutes) Chapter 2 Beginning with the Basics （Part Two） Methods and Plan Trading The Futures Contract 5 minutes These thoughts probably cross your mind: If I choose to enter a contract as a buyer or a seller, what happens if the contract expires and I have to make good? Where will I find all those pork bellies to deliver? 本章开始介绍期 货市场术语和基 本内容，通过问 题的方式来解决 学生可能存在的
What if I'm a buyer? 疑问和不解。 Will my freezer hold 40.000 pounds of firozen 如，期货市场交 hacon? 割问思，以及如 You have nothing to worry about. 何利用和约进行 Fewer than 5 percent of all futures transactions 交易等等。 result in delivery. The vast majority of contracts are offset or priorto delivery You can liquidate your position prior to How do speculators make money on futures contracts if no delivery ever takes place? A commodity futures trader enters into a futures contract by agreeing to sell a commodity or buy commodity according to the precise contract specifications established by the exchange. Make an example on For example,if I choose to trade a contract for com, 用实例来说明期 trading futures I may agree to sell 5.000 bushels of comat $2.11 per 货交易，并且中 10minutes bushel to be delivered in November of the current 英文对照讲解交 year. 易术语，使学生 The position I have established is a"short"position. 了解中文和英文 Now that I have a short position in corn.I have two 期货交易术语， alternatives 目的在于与世界 Oe istohold the position ntil the contract expires 接轨，培养国阿 At that time,I can arrange to buy 5,000 bushels of 人才 corn for cash and then deliver them to the buyer of 如“1ong”为“多 my contract. 头”，“short” If I buy the cor at less than $2.11 per bushel on the 为“空头”，“g0 cash market,I will make money when I sell it for ong"为做多” $2.11 per bushel to the contract buyer “g0 short”为 On the other hand,ifI have to pay more than $2.11 on “做空”之意。 the cash market.I will lose money. For example,if I pay $2.15 per bushel,I lose $.04 per bushel times5.000. 16
16 What if I’m a buyer? Will my freezer hold 40,000 pounds of frozen bacon? You have nothing to worry about. Fewer than 5 percent of all futures transactions result in delivery. The vast majority of contracts are offset or liquidated prior to delivery. You can liquidate your position prior to How do speculators make money on futures contracts if no delivery ever takes place? A commodity futures trader enters into a futures contract by agreeing to sell a commodity or buy a commodity according to the precise contract specifications established by the exchange. 疑问和不解。 如，期货市场交 割问题，以及如 何利用和约进行 交易等等。 Make an example on trading futures 10 minutes For example, if I choose to trade a contract for corn, I may agree to sell 5,000 bushels of corn at $2.11 per bushel to be delivered in November of the current year. The position I have established is a “short” position. Now that I have a short position in corn, I have two alternatives. One is to hold the position until the contract expires. At that time, I can arrange to buy 5,000 bushels of corn for cash and then deliver them to the buyer of my contract. If I buy the corn at less than $2.11 per bushel on the cash market, I will make money when I sell it for $2.11 per bushel to the contract buyer. On the other hand, if I have to pay more than $2.11 on the cash market, I will lose money. For example, if I pay $2.15 per bushel, I lose $0.04 per bushel times 5,000 bushels, or $200. 用实例来说明期 货交易，并且中 英文对照讲解交 易术语，使学生 了解中文和英文 期货交易术语， 目的在于与世界 接轨，培养国际 人才。 如“long”为“多 头”, “short” 为“空头”, “go long”为“做多”, “go short”为 “做空”之意
S2.15-S2.11=S0.04 5000 bushels×s0.04=S200 The other alternative available to meas short er is to offset,or liquidate,my position,hopefully when the futures price of corn will allow me to make a profit. by taking the opposite position.Snce am a seller (short)I can liquidate by becoming buyer (going long).If I went short at $2.11 per bushel and then went long.or liquidated,at $2.05 per bushel,I madeS.06 per bushel times5.000 bushels. which equals$300. The rule is always"Buy low,sell high,"but it can be reversed to"Sell high,buy low." Defining Margin In the futures market,both parties to the transaction 保证金在期货市 5 minutes put up earnest money,which is called margin. 场交易中的作用 Margin usually amounts to approximately 1 percent 和意义。 to 5 percent of the contract value.depending upor requirements of the futures exchange.This is called initial margin. The Purpose&Function of If a trade moves against you,that is,if prices Margin change so that you are losing money on your 细化保证金的作 10minutes position,you might have to put up additional 用使学生加深理 monev.The futures exchange requires traders to 解。如维持保证 maintain a certain amount of margin in their 金，追加保证金 accounts.This is called maintenance margin. 如何界定和交 The futures exchanges that set the margin 付。 requirements attempt to strike a good balance between margin that is high enough to keep the market from being too speculative,and margin that is small enough to attract traders. In the event that a trade or trades move so far against a stomer as to use up the capital in the customer's 17
17 $2.15 – $2.11 = $0.04 5000 bushels ×$0.04 = $200 The other alternative available to me as short seller is to offset, or liquidate, my position, hopefully when the futures price of corn will allow me to make a profit. I can liquidate by taking the opposite position. Since I am a seller (short), I can liquidate by becoming a buyer (going long). If I went short at $2.11 per bushel and then went long, or liquidated, at $2.05 per bushel, I made $0.06 per bushel times 5,000 bushels, which equals $300. The rule is always “Buy low, sell high,” but it can be reversed to “Sell high, buy low.” Defining Margin 5 minutes In the futures market, both parties to the transaction put up earnest money, which is called margin. Margin usually amounts to approximately 1 percent to 5 percent of the contract value, depending upon requirements of the futures exchange. This is called initial margin. 保证金在期货市 场交易中的作用 和意义。 The Purpose & Function of Margin 10 minutes If a trade moves against you, that is , if prices change so that you are losing money on your position, you might have to put up additional money. The futures exchange requires traders to maintain a certain amount of margin in their accounts. This is called maintenance margin. The futures exchanges that set the margin requirements attempt to strike a good balance between margin that is high enough to keep the market from being too speculative, and margin that is small enough to attract traders. In the event that a trade or trades move so far against a customer as to use up the capital in the customer’s 细化保证金的作 用使学生加深理 解。如维持保证 金，追加保证金 如何界定和交 付
account,the brokerage house will issue a"margin call,"which requires that the customer post an additional amount of money by a specified time Should the money not be sent,the brokerage house may,at its discretion,close out the client's positions in order to reduce additional risk exposure to the broker and the brokerage house. Who Sets Margin Margin requirements are determined by and set by the 保证金是谁定 Requirements and Why various futures exchanges.They set requirements in 的，要求如何， 5minutes order to curb excessive speculation and to protect the 为什么。 trader from price swings that are too large for the required margin. You would do well to pay attention to the margir requirements set by the various exchanges. If margins are raised suddenly and by a substantial amount,this is often an indication that the given futures exchange is concerned about the high price level of a market or about its volatility. Margin and Broker Protectior The purpose of margin is to protect the broker and the 对保证金制的总 3 minutes brokerage house as well as the customer. By keeping margins reasonably high,the broker is protected in the event that a trade moves against a customer. Since the broker is liable in the event that a customer cannot meet a margin call,the house must set margins high enough to minimize the risk of the broker being liable for losses. WHAT IS A HEDGE? The primary function of the futures exchange is to 套期保值，它是 3 minutes transfer the risk of the end user or producer to the 规避风险的实质 speculator. 性方法。如何套 This occurs through a process known as hedging 期保值，理论上 Hedging occurs when a producer or end user takes a易说，但实际上 18
18 account, the brokerage house will issue a “margin call,” which requires that the customer post an additional amount of money by a specified time. Should the money not be sent, the brokerage house may, at its discretion, close out the client’s positions in order to reduce additional risk exposure to the broker and the brokerage house. Who Sets Margin Requirements and Why 5 minutes Margin requirements are determined by and set by the various futures exchanges. They set requirements in order to curb excessive speculation and to protect the trader from price swings that are too large for the required margin. You would do well to pay attention to the margin requirements set by the various exchanges. If margins are raised suddenly and by a substantial amount, this is often an indication that the given futures exchange is concerned about the high price level of a market or about its volatility. 保证金是谁定 的，要求如何， 为什么。 Margin and Broker Protection 3 minutes The purpose of margin is to protect the broker and the brokerage house as well as the customer. By keeping margins reasonably high, the broker is protected in the event that a trade moves against a customer. Since the broker is liable in the event that a customer cannot meet a margin call, the house must set margins high enough to minimize the risk of the broker being liable for losses. 对保证金制的总 结。 WHAT IS A HEDGE? 3 minutes The primary function of the futures exchange is to transfer the risk of the end user or producer to the speculator. This occurs through a process known as hedging. Hedging occurs when a producer or end user takes a 套期保值，它是 规避风险的实质 性方法。如何套 期保值，理论上 易说，但实际上