Hedging refers to a way to avoid the risk of actual commodity price fluctuation by buying and selling futures contracts. When conducting futures hedging transactions, it is necessary to use the hedging code to identify whether the transaction is for hedging. Only futures transactions using hedging codes can be recognized as hedging transactions, otherwise they will be regarded as speculative transactions. Therefore, only futures transactions with hedging codes can formulate futures hedging policies.

In futures hedging transactions, it should be noted that the hedging code must be consistent with the actual commodity, otherwise the purpose of hedging will not be achieved.