1. Buying hedging: (also known as long hedging) means buying futures in the futures market, and using long positions in the futures market to ensure short positions in the spot market to avoid the risk of rising prices.

For example, an oil factory plans to buy 65,438,000 tons of soybeans in March two months later. At that time, the spot price was 2200 yuan per ton, and the futures price in May was 2300 yuan per ton. Worried about rising prices, the factory bought100t soybean futures. In May, the spot price really rose to 2400 yuan per ton, while the futures price was 2500 yuan per ton. The factory then bought the spot, with a loss of 0.02 million yuan per ton; At the same time, the futures were sold, and the profit per ton was 0.02 million yuan. The two markets break even, effectively locking in costs.

2. Selling hedging: (also known as short hedging) is to sell futures in the futures market, and use short positions in the futures market to ensure long positions in the spot market, thus avoiding the risk of falling prices.