Hedging refers to using the futures market as a place to transfer price risks, using futures contracts as a temporary substitute for buying and selling commodities in the spot market in the future, and buying them now in preparation for selling them later or Trading activities that insure the price of goods that need to be purchased in the future.

China Eastern Airlines and Air China did hedging in 2008, anticipating that crude oil prices would continue to rise. In order to make up for the rising costs caused by rising oil prices, they bought crude oil futures from futures companies. However, since August, crude oil prices have continued to fall, and China Eastern Airlines and Air China have suffered substantial losses in their hedging books. Another thing worth mentioning is that it is not a time loss of China Eastern Airlines and Air China, because the contract has not expired. In addition, even if the contract expires and the oil price does not reach the expected height, China Eastern Airlines and Air China can still purchase crude oil through the spot market to pay for the futures. , the losses are limited.