Mei Yuntao, General Manager of Wuchan Zhongda Capital Management (Zhejiang) Co., Ltd., delivered his speech Futures and derivative tools promote the steady development of cotton textile enterprises

The report is divided into the following two parts:

1. Cotton textiles futures and options market development overview. This part primarily discusses the global futures and options markets, as well as the situation of cotton options and the options market. It covers the evolution of cotton pricing systems and the development of cotton textile futures derivatives. It also explores the historical trends of close linkage between cotton textile futures and spot markets, risk management in the cotton yarn industry chain, and the profound impact of establishing futures markets on pricing in the cotton yarn industry chain. The advantages of options are analyzed, along with the differences between exchange-traded options and over-the-counter options.

2. Introduction to the application of cotton options in cotton textile enterprises. It mainly covers the application scenarios of cotton options for hedging purposes and introduces several cases along with their corresponding hedging strategies. It also discusses dedicated strategies and case studies for over-the-counter options.

Mr. Mei also highlighted several perspectives on how financial derivatives can further support the development of the cotton textile market. It emphasized the need to strengthen the dissemination of futures knowledge, curb excessive market speculation, and encourage cotton-related enterprises to actively participate in hedging to manage risks. Additionally, it suggested increasing the supply and utilization of over-the-counter cotton products.