Hedging liquidation refers to the option contract settlement method in which the options held by investors are hedged by the same options with opposite trading directions and equal trading quantities. Hedging refers to the settlement of previously bought (sold) contracts by selling (buying) futures contracts in the same delivery month. Closing a position refers to the behavior of futures traders to buy or sell futures contracts with the same variety, quantity and delivery month but in the opposite direction, and close futures trading.
Hedging: an investment that deliberately reduces the risk of another investment. This is a way to reduce business risks while still making profits from investment. General hedging is to conduct two transactions at the same time, both related to the market, in the opposite direction, with the same amount and breakeven. Market correlation refers to the identity of market supply and demand that affects the prices of two commodities. If the relationship between supply and demand changes, it will affect the prices of two commodities at the same time, and the prices will change in the same direction. The opposite direction means that the buying and selling directions of two transactions are opposite, so that no matter which direction the price changes, there is always a profit and a loss. Of course, in order to protect the capital, the number of two transactions must be determined according to the range of their respective price changes, so that the number is roughly the same.
Liquidation: refers to the behavior of futures traders to buy or sell futures contracts with the same variety, quantity and delivery month but with opposite trading directions, and to liquidate futures transactions. The whole process of futures trading can be summarized as opening positions, holding positions, closing positions or physical delivery. An open contract after opening a position is called an open contract or an open contract, also known as a position. After opening the position, traders can choose two ways to close the futures contract: either choose the timing of closing the position or reserve it for physical delivery on the last trading day.