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Risk aversion and price discovery are two basic functions of the futures market. Right?
Yes, risk aversion and price discovery are two basic functions of the futures market. The function of the futures market to avoid risks refers to the establishment of a profit-loss offset mechanism between the futures market and the spot market through hedging transactions in the opposite direction, so as to make up for the losses of the other market with the profits of one market and achieve the purpose of locking in costs and stabilizing profits; Price discovery refers to the process that buyers and sellers make the transaction price of a certain quality and quantity of products close to its equilibrium price at a certain time and place through trading activities under market conditions.