Avoiding interest rate risk is one of the most basic functions of interest rate futures, which can transfer the risk brought by interest rate fluctuations from risk evaders such as commercial banks to speculators who are willing to take risks and expect to profit from them. This function of interest rate futures stems from its inherent price fluctuation characteristics. Because of the same or similar influencing factors, the price trend of interest rate futures is basically the same as that of its subject matter. When the spot price tends to rise, its futures price tends to rise, and vice versa. Therefore, the hedger can realize the hedging function by doing the opposite transaction in the futures market and avoid the asset loss caused by interest rate fluctuation.

By establishing appropriate long or short positions in the interest rate futures market, investors can effectively avoid the potential risks that may be brought to them by future market interest rate changes. Take the bank as an example. If the bank plans to buy a certain amount of 5-year treasury bonds at some time in the future, but he is worried that the decrease of market interest rate in the future will lead to an increase in bond prices and increase his purchase cost, then he can establish a long position in the treasury bond futures market in advance. If the market interest rate rises as expected, banks will suffer losses due to the cost of buying bonds, but these losses are basically offset by the profits made by banks in the futures market because of long hedging. or vice versa, Dallas to the auditorium