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How to deal with the negative event of oil price?
First of all, investors should strictly control risks. Affected by the epidemic, negative growth, negative interest rates and negative oil prices will probably become the norm in the future, and individual investors should invest cautiously in this context. Investment products based on negative oil prices or commodities with possible negative prices need to be carefully screened. Don't invest easily, let alone bargain-hunting. Buffett never invests in unfamiliar products. Any underlying investment must be seen through. What is the bottom? /kloc-during the financial crisis 0/2 years ago, many people suffered huge losses when investing in structured wealth management products. The reason is that the underlying financial products they invested in were American real estate subprime loans, and the final bursting of the subprime bubble caused huge losses to the upper products.

Secondly, enterprises should hedge their risks through financial instruments and industrial chains. The function of futures lies in discovering prices and hedging. Hedging is essentially hedging big risks with small costs, not nominal hedging. There is no such thing as a free lunch, so managing the hedging risk requires the cost of purchasing futures options. In the era of negative growth, negative interest rate and negative oil price, the market price is not unusual. Oil production, supply, demand, trade, investment and other parties need to hedge risks through derivatives such as futures and options, otherwise once the price fluctuates sharply, the risks will be uncontrollable. Therefore, enterprises should improve their ability to master risk hedging tools such as futures options. For example, try to buy put options or call options and try not to sell options. Because buying options means you have the option to exercise, while selling options means unlimited risks. Not to mention the Cao incident, the negative growth of oil prices is just around the corner.