A Case Study Of Risk Control On Copper Futures Transcation

With the rapid economic development of China, the futures market plays a more and more important role in the whole economic system. The existence of the futures market is helpful to avoid the risk of price fluctuate and make trustful price of merchandise. But at the same time, the futures market is a place where all types of risks concentrated on, the risks origin from the uncertainty of the factors that affect the futures market. The risk occurrence in futures market not only harm the benefit of investors, but also harm the steadiness of the futures market. Copper is a kind of world large quantity industrial raw material. Due to the Chinese consumption of copper increasing year after year, outputs and imports quantity restricted by some objective conditions, and the contradiction of market supply and demand appeared.The essay expounds the history and function of commodity futures, futures goods and on-hand merchandise's relations, hedge's principle, function and strategy, our country's copper production and consumption situation, transaction situation and rules of copper's futures trading in London Metal Exchange. It comprehensive analyzes risk type, risk origin, risk recognition, risk survey and risk control method in the futures trading. Finally while the paper in a method of case study discusses Chinese investors who develop international futures goods transaction vigorously, it also proposes the risk control countermeasures in terms of how to hedge against risk in the future goods operating process, as well as mew situation and problems met in the present international copper's futures trading. This topic is point on the hedging of copper, analyzing the process of the whole event of SRB in detail, and summing up experience from some aspects, such as trade market, exchange style and establishment of inner risk control system of a company, discussing the tactics of hedging and inquiring into the risk control of hedging, providing enterprises new thinking and solved methods in avoid raw material's price risk, thereby ensuring enterprises developed steady.