Both companies and individuals can participate in the former, while both companies and individuals can participate in the latter.

The former has gains and losses, and the latter also has gains and losses.

Arbitrage is to invest a small amount of money to make a profit according to your own judgment on the market outlook.

Hedging is to use the option futures market to protect your own spot or futures (such as stocks, exchange rates, stock indexes, etc.). ). For example

For example, if you have 65,438+000 shares in your hand, you expect the market outlook to be bullish, but you are worried that the stock will fall instead of rising, then,

You bought a put option on this stock, which guarantees that you have the right to sell this stock at the current price.

Specifically, I recommend you to read the book Introduction to Futures and Options.