Futures hedging refers to the trading activities in which the futures market is used as a place to transfer price risks, and futures contracts are used as temporary substitutes for buying and selling commodities in the spot market in the future to insure the prices of commodities to be bought in the future. Futures hedging can be divided into long hedging and short hedging. Long hedging: a futures trading method in which traders buy futures in the futures market first to avoid causing economic losses to themselves when buying in the spot market in the future. Therefore, it is also called "long hedging" or "short hedging". Short hedging: also known as selling hedging, refers to a futures trading method in which traders sell futures in the futures market first, and when the spot price falls, the profit in the futures market makes up for the loss in the spot market, thus realizing the value preservation. Short hedging is a trading method to sell contracts equivalent to the spot quantity in the futures market in order to prevent the risk of spot price falling during delivery. Hold short positions to hedge the spot that traders will sell in the spot market. Therefore, selling hedging is also called "short selling hedging" or "selling hedging".

Enterprise is the cell of social economy. What, how much and how to produce and operate with their own or mastered resources are not only directly related to the production economic benefits of the enterprise itself, but also to the rational allocation of social resources and the improvement of social economic benefits. The key to the correctness of enterprise's production and management decision lies in whether it can correctly grasp the market supply and demand state, especially whether it can correctly grasp the next changing trend of the market. The establishment of the futures market not only enables enterprises to obtain the supply and demand information of the future market through the futures market, but also improves the scientific rationality of the enterprise's production and operation decision-making, and truly determines the production on demand. It also provides a place for enterprises to avoid market price risks through hedging, which plays an important role in improving the economic benefits of enterprises.