(1) Hedging (hedge): It is to buy (sell) futures contracts that are equivalent to the spot market but in the opposite trading direction, with a view to selling (buying) at a certain time in the future. ) futures contracts to compensate for the actual price risk caused by price changes in the spot market.

The most basic types of hedging can be divided into buying hedging and selling hedging. Buy hedging refers to the act of buying futures contracts through the futures market to prevent losses due to rising spot prices; selling hedging refers to selling futures contracts through the futures market to prevent losses caused by falling spot prices. Behavior.

Hedging is the driving force behind the futures market. Whether it is the agricultural product futures market, or the metal, or energy futures market, they originate from the transaction behavior of buying and selling forward contracts that are spontaneously formed when faced with risks caused by violent fluctuations in spot prices during the production and operation process. This trading mechanism for forward contract buying and selling has been continuously improved, such as standardizing contracts, introducing hedging mechanisms, establishing a margin system, etc., thus forming futures trading in the modern sense. Enterprises buy insurance for production and operations through the futures market, ensuring the sustainable development of production and operation activities. It can be said that without hedging, the futures market would not be a futures market.