Hedging is generally carried out in futures and spot markets. Generally, hedging ends, but sometimes you can choose to wait until the delivery month for direct physical delivery. I will explain these two situations separately below.

1. Choose hedging, and the operation of the two markets in the future will be like this.

Assume that the spot price of hedging long position is 3500 when it is established and 3900 when future positions is eliminated.

Spot market futures market

Jiancang 3500 3600

Close position 3900 4000

Operation: Close futures bulls at 4000 price and buy threads at 3900 price in the spot market.

Significance: The actual purchase price of goods =3900-(4000-3600)=3500 plays the role of hedging.

2. Select the actual delivery due

At this time, the profit of (4000-3600)=400 is already in the buyer's multi-head account, so the buyer can pay the seller according to the current purchase price of 3600 to get the thread worth 4000, and hedging also plays a role.