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How iron and steel enterprises use futures to avoid risks
1. Iron and steel enterprises need futures hedging to avoid risks and use futures market for spot hedging.

2. Iron and steel enterprises are producers themselves and have a lot of cash on hand. In order to prevent the price from falling, leading to spot losses, then Zhihu will sell short and open short orders in the futures market.

3. If the market drops by 50 yuan after 3 months, the spot market loses 50 yuan/ton, but the futures market gains 50 yuan/ton because it is short.

4. Spot losses, futures earn 50 yuan/ton, futures offset, thus hedging.