One of the basic economic functions of futures market is to provide price risk management mechanism for spot enterprises. In order to avoid price risk, the most commonly used means is hedging. The main purpose of futures trading is to transfer the price risk of producers and users to speculators. When spot enterprises use the futures market to offset the reverse movement of spot market prices, this process is called hedging. Hedging is also translated as "hedging transaction" or "Qin Hai". Its basic practice is to buy or sell commodity futures contracts with the same number of transactions but opposite directions in the spot market, so as to hedge and close positions and settle the profits or losses brought by futures trading at a certain moment in the future, so as to compensate or offset the actual price risks or interests brought about by price changes in the spot market and stabilize the expected annualized income of traders at a certain level. Hedging principle first, although the fluctuation range of futures price and spot price will not be exactly the same during futures trading, the changing trend is basically the same. That is, when the spot price of a specific commodity tends to rise, its futures price tends to rise, and vice versa. This is because although the futures market and the spot market are two independent markets, the main influencing factors of futures prices and spot prices are the same for specific commodities. In this way, the factors that lead to the rise and fall of spot market prices will also affect the rise and fall of futures market prices in the same direction. Hedgers can achieve the function of hedging by doing the opposite transaction in the futures market to the spot market, thus stabilizing the price at the target level. Second, the spot price and the futures price will not only change in the same direction, but also be roughly equal or merged when the contract expires. This is because the futures price includes all the expenses of storing the goods until the delivery date, so the forward futures price is higher than the futures price. When the futures contract approaches the delivery date, the storage cost will gradually decrease or even disappear completely. At this time, the determinants of the two prices are almost the same, and the futures price in the delivery month tends to be consistent with the spot price. This is the principle of market trend convergence between futures market and spot market. Of course, the futures market is different from the spot market and will be affected by some other factors. Therefore, the fluctuation time and range of futures prices are not necessarily the same as spot prices. In addition, there is marketing unit in the futures market, and the number of operations in the two markets is often not equal, which means that the hedger may gain extra profits or generate small losses when offsetting profits and losses. Therefore, when we conduct hedging transactions, we should also pay attention to the factors that may affect the hedging effect, such as basis, standard deviation of quality, poor trading quantity and so on. , so that the hedging transaction has achieved satisfactory results and provided effective services for the production and operation of enterprises.