Futures contracts must become a tool for hedging and pricing because through this hedging transaction, although the spot market price has changed unfavorably to the oil plant, the price has increased by 40 yuan/ton, thus the cost of raw materials has increased by 4,000 yuan; However, the trading in the futures market made a profit of 4,000 yuan, thus eliminating the impact of adverse price changes.

The trends of spot and futures markets converge (under normal market conditions). Because these two markets are affected by the same relationship between supply and demand, prices rise and fall together. However, due to the opposite operation and profit and loss of these two markets, the profit of futures market can make up for the loss of spot market, or the appreciation of spot market is offset by the loss of futures market.

Extended data:

Hedging stock index futures refers to a trading method in which investors buy corresponding stock index futures contracts for hedging because they are worried about the rising price of target index or stock portfolio.

The act of hedging a transaction at the end of a hedging period. The purpose of buying hedging is to lock in the buying price of the target index fund or stock portfolio and avoid the risk of price increase.

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