(1) same or similar variety principle

This principle requires investors to choose the same or as close as possible to the spot variety to be hedged when hedging; Only in this way can the consistency of price trends between the spot market and the futures market be guaranteed to the greatest extent.

(2) the principle of the same or similar month

This principle requires investors to choose the delivery month of futures contracts and the proposed trading time in the spot market as much as possible when hedging.

(3) the opposite principle

This principle requires investors to buy and sell in the spot market and futures market in opposite directions when implementing hedging operations. Because the price trend of the same kind (similar) goods in two markets is the same, it is bound to make a profit in one market and lose money in the other market, thus achieving the purpose of maintaining value.

(4) the principle of equivalence

This principle requires that when investors hedge, the number of commodities specified in the contract of the selected futures varieties must be equivalent to the number of commodities to be hedged in the spot market; Only in this way can the profit (loss) of one market be equal to or close to the loss (profit) of another market, thus improving the hedging effect.

The above short answer If you also feel good and are holding foreign exchange gold crude oil contract futures: