It’s a very simple question

The chances of oil prices rising and falling are equal, but the result may not be what the company can afford. Are you willing to let the company go bankrupt at 50%? Under the situation of 50% huge profit? As an operator, of course I don't want to. Through careful management, the company can obtain normal profits, and will not take 50% of the risk of bankruptcy and gain the other 50% of the opportunity to make big profits. Just like normal people will not participate in a gambling game where they lose their lives if they lose and get a huge sum of money if they win. Normal people can live a normal and happy life through normal efforts. Of course, there are always a few people who are willing to do this.

The emergence of the futures market is based on this. One of the functions of the futures market is to transfer risks. What normal operators want to earn is only operating profits, and they do not want to bear the inestimable risks and benefits caused by violent price fluctuations. Therefore, risks are hedged through futures hedging. It is the speculators in the futures market who bear the risk. In the entire market, the risk has not been eliminated, but has been transferred. But for the hedging company, its risk is gone.