Hedging and closing a position refers to closing an investment through a transaction in the opposite direction and with the same amount as when the position was opened. In futures trading, the methods of position closing are divided into hedging position closing and performance closing. Since the exchange has regulations on investors’ delivery qualifications and most investors do not have the ability to perform contracts, most investors use hedging to close positions. to close the investment.

Futures, the English name is Futures, are completely different from spot goods. Spot goods are real goods (commodities) that can be traded. Futures are not mainly goods, but some mass products such as cotton, soybeans, and oil. etc. and financial assets such as stocks, bonds, etc. as underlying standardized tradable contracts. Therefore, the subject matter can be a certain commodity (such as gold, crude oil, agricultural products) or a financial instrument.

The delivery date of futures can be one week later, one month later, three months later, or even one year later.

A contract or agreement to buy or sell futures is called a futures contract. The place where futures are bought and sold is called the futures market. Investors can invest or speculate in futures.

The futures market first sprouted in Europe. As early as the ancient Greek and Roman periods, there had been central trading venues, bulk barter transactions, and trading activities with the nature of futures trading. The original futures trading developed from spot forward trading.

The first modern futures exchange was established in Chicago, USA, in 1848. The exchange established a standard contract model in 1865. In the 1990s, my country's modern futures exchange came into being. There are four futures exchanges in our country: Shanghai Futures Exchange, Dalian Commodity Exchange, Zhengzhou Commodity Exchange and China Financial Futures Exchange. The price changes of their listed futures products have a profound impact on related industries at home and abroad.

The background of the emergence of China's futures market is the reform of the grain circulation system. As the country cancels the policy of monopolizing the purchase and marketing of agricultural products and liberalizes the prices of most agricultural products, the market plays an increasingly important role in regulating the production, circulation and consumption of agricultural products. The rise and fall of agricultural product prices, the non-disclosure and distortion of spot prices, and the distortion of agricultural production Problems such as the sudden rise and fall and the lack of value preservation mechanism of grain enterprises have attracted the attention of leaders and scholars.