Basis Risk In the traditional hedging theory, it is assumed that the futures price is consistent with the spot price, and the basis is zero when the contract expires. However, in practice, hedging is not so perfect. For example, commodity futures such as metals and agricultural products, due to the imbalance between supply and demand and warehousing, especially in the case of forced liquidation, the basis may change greatly and the basis risk is greater. Decision-making risk hedging is not simply buying or selling, and what kind of decision to make must be based on the judgment of market trends. If you misjudge the futures market, you may make the opposite decision. When judging that the market is in a bull market, enterprises tend to buy and hedge raw materials, while when judging that it is a bear market, enterprises tend to sell and hedge products. If it is only based on simple hedging decision, it is easy for enterprises to lose money. In addition, in practice, it is also very important to judge the timing and location of the entry point of the futures market. Even if it is only a day or two away, the effect gap of hedging may be very large. Financial risk enterprises should calculate the optimal hedging position according to the purchase quantity or product sales quantity when hedging. When the scale of production and operation is large, the number of future positions is also large, and because of the continuity of production and operation, the holding time is relatively long, even if the hedging direction is correct, it is easy to produce financial risks. The first is the risk of insufficient margin. During the hedging period, the futures price may fluctuate violently for a short time. Although hedging is in the right direction, spot enterprises may also face the huge risk of additional margin. Second, in some cases, the temporary loss of hedging positions is due to the pressure of shareholders, especially for some listed companies whose hedging cycle has not ended, but the reporting date is near, and enterprises are often forced to close their future positions. Liquidity Risk For enterprises, generally, a hedging scheme is formulated according to the annual raw material procurement plan or product sales plan. If the spot purchase or sale is balanced, the enterprise must operate in the corresponding futures contract month. However, the activity and liquidity of different contracts in the futures market are different. If the liquidity of the corresponding futures contract is poor, the enterprise can only choose a more recent contract to replace it and adjust the position when it expires. If the basis difference between different months is small, it will have little impact on the hedging effect, and if the basis difference is abnormal, it will seriously affect the hedging effect. Delivery risk Although delivery accounts for less than 5% of the total amount in futures trading, and hedging does not necessarily end with delivery, as a spot enterprise, when it is profitable to purchase raw materials or sell products in the futures market, physical delivery is also a common problem for enterprises to hedge. There are many links in spot delivery and the procedures are complicated. If it is not handled well, it will affect the hedging effect. The delivery risk mainly comes from the following aspects: whether the delivered goods meet the quality standards stipulated by the exchange; There are many transportation links in delivery, so can the delivery time be guaranteed? Whether the cost control in the delivery process is in place; Whether the delivery warehouse cannot be put into storage due to storage capacity; The premium of substitute varieties; There is a value-added tax problem in delivery, and so on. Speculative risk Futures speculation can sometimes bring huge profits to enterprises, which makes enterprises often give up the purpose of hedging, or fail to strictly implement the hedging plan, resulting in futures operation called hedging, which is actually speculation, and brings losses to enterprises when the market direction changes or misjudges. The total amount of futures trading should be compatible with the total amount of spot trading in the same period, that is, enterprises should limit the number of hedging positions to no more than the size of spot goods. Some enterprises initially entered the futures market for the purpose of hedging, but later failed to effectively control the positions beyond their production or processing scale, which led to the transformation of hedging into futures investment and ultimately suffered heavy losses. . There are almost too many commodity futures and financial futures. . . The essence is the same.