How to use the futures market to avoid the risks caused by spot price fluctuations?

If you are afraid that the price of the goods you sell will fall, implement selling hedging. When the spot price falls (spot loss), your futures are profitable, and the two offset each other to avoid the risk of falling prices.

When you need spot raw materials and are afraid of rising prices, implement buy hedging. When the price rises (that is, you overpay), your futures are profitable and make up for the overpayment.

The above is a simple principle.

What is hedging?

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