Using stock index futures to avoid stock market risks, both parties close their positions at the same time. Of course, the number of futures contracts required for hedging is usually determined and adjusted according to the beta coefficient. Secondly, we should consider the liquidity of futures contracts.

Buying hedging is a protective measure for bull market. If investors want to sell their stock portfolio at some time in the future, they will pay more for the purchase to prevent the price from rising. Selling hedging is a hedging measure for bearish stock market, next month and two consecutive quarters.

The use of futures index hedging should also consider the problem of term matching, and the other is to worry about price decline, that is, close the futures hedging transaction while closing the spot stock position, first sell the stock index futures contract equivalent to the spot stock portfolio in the futures market, and choose the same time as the spot stock portfolio operation. Beta coefficient is an index used to measure the relationship between the risk of a security (or a group of securities) and the risk degree of the whole securities market. To this end.

The simple way to end hedging is to lock in profits. If investors want to buy a stock portfolio at some time in the future, they should first buy stock index futures contracts with the same value as the stock portfolio in the futures market.