The so-called hedging generally means that futures traders open positions of equal quantity but in opposite directions, so that no matter which direction the futures price moves (either up or down), the profit or loss of the position will not increase or decrease. a method of operation.

Since unlocking is a very complex project, and investors are inexperienced and unsure of the market situation, they will be hesitant and the unlocking work will be delayed again and again, resulting in transaction costs. Continuously increasing;

This kind of transaction cost is not only explicit costs, such as overnight interest and time costs, but also includes invisible costs, such as the continued rise or fall of the market, resulting in the continuous expansion of the lock-in price. A heaven and earth lock is formed, which makes the difficulty of unlocking continue to increase, and the time to unlock will become even more elusive.

Lock position refers to an investment term, usually used in spot trading, foreign exchange margin, and futures margin trading. Lock-up generally means that after investors buy and sell contracts, when the market trend is opposite to their own operations, they open a new position opposite to their original position. It is also called lock-in, lock-up, or even euphemistically called butterflies flying together. Hedging is generally divided into two methods, namely profit locking and loss locking. The so-called hedging generally refers to an operation method in which investors open positions of equal quantity but in opposite directions, so that no matter which direction the price moves, the profit or loss of the position will not increase or decrease.

Data source: Baidu Encyclopedia: Lockup