Foreign exchange hedging is to use forex futures trading to ensure that the value of foreign currency assets or liabilities is not or less affected by exchange rate changes, which can be divided into foreign exchange futures selling hedging, foreign exchange futures buying hedging and cross hedging.

Among them, foreign exchange futures selling hedging refers to traders who are in a long position in the spot market. In order to prevent the exchange rate from falling, they sell futures contracts in the forward foreign exchange market to hedge the spot price risk.

Buying foreign exchange futures hedging refers to traders who are short in the spot market. In order to prevent the exchange rate from rising, they buy foreign exchange futures contracts in the futures market to hedge the spot price risk.

Cross hedging refers to the use of two related foreign exchange futures contracts as foreign exchange hedging.