The Strategy Research About Enterprise W Applying Futures And Option Arbitrage

With the developments of futures markets in China for more than twenty years, the futures markets play a more and more important role in market-oriented economy. The corporation will actively apply futures derivatives to hedge the risk of fluctuation of price, and also it’s an important profit-earning way.For the ever-increasing financial features in bulk commodity, the unexpected factor often arise that influent and cause the violent fluctuation of price in the bulk commodity. The traditional arbitrage trading of futures and spots, futures calendar spread, futures spread in different markets and to different commodity will not match the risks and benefits. New hedge instruments are needed for the metal enterprise, energy enterprise and grain & oil enterprise. Options trading is an important part of futures markets, and which is proved an effective instrument in hedging risk by enterprises all over the world. It is recognized by participants in the markets that hedge products in options should be exploited as quickly as possible for suiting domestic market demands.This article is based on related hedging risk control theory. We analyzed several unsuccessful typical cases of options hedge trading in China and summarized the case about RMB option hedge real trading in W enterprise. And We concluded some risk point in options trading, emphasized some factors in planning RMB options trading. Combining the present situation in W enterprise, we analyzed the condition of launching RMB options trading and discussed how to apply futures and options hedging tools to meet the needs of clients and our company. We are searching the dynamic balancing between the scale of financial derivative instruments and risk management for enhancing the company’s core competitiveness. And we are really hoping to do some beneficial things in developing products on floor trading market as early as possible in China futures markets.