Futures delivery refers to the delivery of goods or cash by buyers and sellers according to the terms stipulated in the contract when the futures contract expires. Delivery can be in kind or in cash. Physical delivery refers to the actual transfer of the ownership of the goods at the time of delivery, and cash delivery is settled in cash at the expiration of the contract, with the buyer paying the contract price and the seller paying at the market price.

Hedging means that enterprises or investors use futures market transactions for risk management to ensure the safety of their own operations or investments. For example, faced with the risk of seasonal price fluctuations and changes in supply and demand, agricultural production enterprises can hedge through the futures market, that is, while selling agricultural products in the spot market, they buy a corresponding number of futures contracts to protect the price risk.

For example, suppose a producer of agricultural products expects to produce 200 tons of wheat in the next season and plans to sell it to buyers in the market, but because the price of wheat fluctuates greatly, the producer is not sure what the price of wheat will be in the next few months. In this case, producers can hedge through the futures market, that is, sell wheat in the spot market and buy a corresponding number of wheat futures contracts in the futures market at the same time. When the price of wheat fluctuates, producers can use the price of futures contracts to protect their own profits, thus avoiding the risks brought by price fluctuations.

Therefore, delivery and hedging in the futures market are the basic concepts of the futures market, and it is very important for investors and participants in the futures market to understand these concepts.