Hedging refers to buying and selling futures contracts as commodities in the future spot market with the futures market as the place to transfer price risk.

A temporary substitute, a trading activity that provides insurance for the price of goods that it buys now and prepares to sell later or needs to buy in the future.

Hedging method

1. Sales hedging of producers:

Whether it is farmers who provide agricultural and sideline products to the market or enterprises that provide basic raw materials such as copper, tin, lead and oil to the market, as

Suppliers of social goods will sell goods to the market in the future in order to ensure that they have produced and are ready to provide them to the market or are still in the process of production.

Reasonable economic profits can be reduced by selling hedging transactions in order to prevent the official selling price from falling and suffering losses.

Price risk, that is, selling the same amount of futures as a seller in the futures market as a means of hedging.

2. The operator sells the hedging:

For the operator, the market risk he faces is that when the goods have not been resold after the acquisition, the price of the goods will fall, which will make him

Operating profit decreased or even lost. In order to avoid this market risk, operators can use the method of selling hedging to carry out price insurance.

3. Comprehensive hedging of processors:

For processors, market risks come from buyers and sellers. He is worried about the rising prices of raw materials and the falling prices of finished products.

I am even more afraid of rising raw materials and falling prices of finished products. As long as the materials needed by the processor and the finished products after processing can enter the futures.

Market transactions, then he can use the futures market for comprehensive hedging, that is, to buy raw materials for hedging, to its

If the product is sold for a period of time, it can relieve his worries and lock in his processing profits, thus specializing in processing and production.

Three. The role of hedging

Enterprise is the cell of social economy. Enterprises use their own or mastered resources to produce and manage what, how much and how to produce.

Management is not only directly related to the production economic benefits of the enterprise itself, but also related to the rational allocation of social resources and the improvement of social economic benefits.

Tall man. Whether the production and management decisions of enterprises are correct or not depends on whether the market supply and demand can be correctly grasped, especially whether the market can be correctly grasped.

The next trend in this field. The establishment of the futures market not only enables enterprises to obtain the supply and demand information of the future market through the futures market, but also improves the efficiency of enterprises.

The scientific and rational decision-making of the industry's production and operation can truly achieve the production on demand and provide enterprises with hedging to avoid market price risks.

It plays an important role in improving the economic benefits of enterprises.

Four. Hedging strategy

In order to better achieve the purpose of hedging, enterprises must pay attention to the following procedures and strategies when conducting hedging transactions.

(1) Adhere to the principle of "equality and relative". "Equality" means that commodities traded in futures must be traded in the spot market.

The goods are of the same kind or related quantity. "Relative" refers to the opposite buying and selling behavior in two markets, such as in the spot.

Buy in the market, sell in the futures market, and vice versa;

(2) Spot transactions with certain risks should be selected for hedging. If the market price is relatively stable, there is no need to hedge.

Hedging transactions need to pay a certain fee;

(3) Comparing the net risk amount with the hedging cost, and finally determining whether to hedge;

(4) according to the short-term price trend forecast, calculate the basis of the expected change (that is, the difference between spot price and futures price), and according to

The timing of entering and leaving the futures market is planned and executed.