Empirical Study Of The Basic Functions Of The Zhengzhou Commodity Exchange Futures Market

With the flourish of the construction of the market, the futures market and the spot market is important for the development of our economy. Because our country has a large population and the importance of agricultural products in the market should not be overlooked. This article is mainly based on the Zhengzhou Commodity Exchange activity traded of cotton and wheat to conduct empirical research.Through summarizing and introduce the overview and basic functions of the two markets to research the two basic functions of futures market by Eviews7.2.By ADF test and Johansen cointegration find futures prices as well as the spot prices is a first-order single whole sequence, having a cointegration, VECM as well as the Granger causality test results showing futures prices is good for guiding spot price.Through the impulse response found that the two research oblect of the futures markets are able to show the huge impact effect on the spot price; On the two markets in Zhengzhou, cotton and wheat variance decomposition shows that the former is the main factor causing the latter change, while the smaller impact of the latter on the former role. Through the analysis of many aspects of the research shows that the price discovery function to get a good play.Mainly using the more commonly used in hedging of OLS model and B-VAR modelas well as ECM for research.After comparing the results find ECM is the optimal;Comprehensive analysis of overall study results find after conducting hedging has been reduced earnings volatility will also be able to circumvent the spot price risk.Although the futures market plays two functions has been partially proved, it is still imperfect. We should further energize the market management and Standardized futures transaction system for the problems; At the same time, we will also should concerned about the operation of spot market, we should establish a market supervision and guidance department to run its supervision, management and guidance to regulate its operation mechanism; We should facilitate spread quickly of information to contacts the two markets and enhance their relevance, but also to increase the knowledge of futures market popularity.