Everything has two sides, and hedging is no exception. So what are the advantages and disadvantages of arbitrage? The following is the editor’s introduction.

The advantages of hedging: 2. Low risk. Generally speaking, when hedging, since the sales contracts are for the same kind of goods, two futures with different delivery months The contract prices are consistent in the direction of movement, and the loss of the purchased futures contract disappears due to the benefit of the sales contract or is compensated for the loss of the sales contract. Therefore, hedging can provide certain protection against losses caused by violent price fluctuations, and its liability The risk of hedging is smaller than that of ordinary one-way speculative trading. Disadvantages of hedging: 1. Limited returns. In the minds of many traders, the biggest disadvantage of hedging is that potential returns are limited. Of course, this is true. Limiting the risks in transactions usually It also limits potential returns. However, whether to ultimately choose a hedging transaction must weigh the many advantages of hedging and the limited potential returns. 2. Price gap information is difficult to obtain. Unlike overseas, there is no price gap quotation in my country and no institution specializes in research Price gap, publish price gap information and related comments. It is difficult for many small and medium-sized retail investors to obtain price gap information, and it is difficult to hedge against the expected market. They do not dare to blindly report a few hedging articles by chance. Because they are interested in hedging. Little is known about futures hedging. However, institutional investors use their financial advantages to hire experts to study hedging, seize various hedging opportunities, and support large-fund hedging transactions.