A50 futures is one of the indexes compiled by Xinhua FTSE Index Co., Ltd., which is mainly for foreign investors and investors in China who are interested in China A shares. The sample of A50 index is the 50 companies with the largest total market value in Shanghai and Shenzhen stock markets, and the market value of these 50 companies accounts for about 35% of the market value of China A-share market, which is very representative.

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Basic characteristics of hedging

In the spot market and the futures market, the same commodity is bought and sold in the same amount at the same time but in the opposite direction, that is, the same amount of futures is sold or bought at the same time in the futures market. After a period of time, when the price changes make profits and losses in spot trading, the losses in futures trading can be offset or compensated. So as to establish a hedging mechanism between "now" and "period" and between near and far, and minimize the price risk.

theoretical basis

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 of these two markets, the profit and loss are also opposite, and the profit of the futures market can make up for the loss of the spot market.