The method of enterprise foreign exchange hedging;
If hedging is carried out, a certain proportion of reverse operations can be done in the futures market, and the losses caused by price fluctuations in the spot market can be compensated by the gains brought by price fluctuations in the futures market, so as to achieve the effect of controlling costs and locking in profits.
Hedging is an effective way for entity enterprises to manage risks. It allows spot enterprises to offset the price fluctuation that is not conducive to the operation of enterprises in the spot market through the futures market and resolve the price risk. For the derivatives market, the participation of hedgers can stabilize the market price and avoid the disorderly price fluctuation caused by speculation in the virtual part of the economy.
Hedgers are both operators of spot market and traders of futures market, which further strengthens the connection between futures market and spot market. Spot market is the basis of futures market, and futures market can guide spot operators to find prices.
The application of hedging strengthens the connection between futures market and spot market. By promoting hedging business, the two markets can promote each other and develop together.
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.