Farmers take away agricultural products, such as wheat. First, if the market is difficult to judge or the price is obviously going to fall, you can sell the wheat futures contract in the futures market, so that although you lose some cash when selling wheat, you can get almost the same profit in the futures market. This operation is called hedging.

If the market is bullish, then the wheat in your hand can fetch a good price. If the market is expected to rise obviously, you can buy wheat in the futures market at the same time and then close your position. In the futures market, you can get double the income of the spot market. This is called speculation or investment, but only if you judge in the right direction.

Third, futures can be delivered by institutions. If you are an enterprise, you can go to the nearest futures wheat delivery warehouse to establish a wheat warehouse receipt, sell it in the futures market in advance, and then sell it to the other party when the futures contract expires, so as to ensure the reasonable price of the wheat you sell in advance and avoid the downside risk.

There are no futures options in China for the time being, so we will not consider them for the time being.