Ace Elite: What does leverage mean for stock index futures?

Ace Elite:stock market indexfuturesWhat does leverage mean?
  Stock index futures, also known as stock price index futures, refer to standardized forward contracts based on stock price indices. The trading parties agree to buy and sell the underlying index at a specific point in the future based on the previously determined size of the stock price index. Delivery is made in cash on the delivery date by settling the price difference, usually using the closing index on the last trading day as the standard for settlement.

Leverage of stock index futures:
Investing in stock index futures, investors only need to pay a certain ratio of funds according to the price of the futures contract as financial guarantee for fulfilling the futures contract(bond)You can then engage in buying and selling futures contracts. This small and broad investment approach is known as the leverage effect of stock index futures.
Leverage ratio of stock index futures:
Stock index futures leverage refers to the practice of applying leverage to stock index futures. The trend speculation trading strategy of stock index futures includes buying long and selling short, namely long speculation and short speculation. In speculative trading, traders earn profits through the bid-ask spread.
The margin of the general stock index futures exchange is12%The margin of futures companies is generally15%So the leverage ratio is1/15%=7So the leverage ratio of stock index futures is approximately7About times.
Example: Shanghai and Shenzhen300The exchange of stock index futures charges a margin level equal to the face value of the contract12%If Shanghai and Shenzhen300The settlement price of the index is1400So, the next day the exchange will collect the deposit for each contract as follows:1400*300element/spot*12%=5.04Ten thousand yuan.
Participating in stock index futures, whether long or short, or hedging, arbitrage, or speculation, requires a clear understanding of the fundamentals of the securities market, and then selecting appropriate strategies and leverage levels. Generally speaking, the exchange will make necessary adjustments at any time according to market changes, and the trading margin that investors need to pay will fluctuate upwards based on the exchange's regulations.
The leverage of stock index futures can help investors amplify returns, but it also amplifies risks, so controlling risks is the first priority.
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