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Why does futures trading not only have the function of finding prices, but also the function of transferring risks? Please answer in detail with economic theory.
After long-term verification, the spot price will follow the futures price, that is to say, the futures will fall, the spot will also fall, and the spot will also rise. The transfer risk is, for example, if you have 10 tons of cotton now, you can't sell it until June, but according to various news and market conditions, you think the cotton price will fall by June, so you can sell 10 tons of cotton in the futures market in advance. In June, the price really dropped. You can buy 10 tons of cotton in the futures market. This is hedging.