Fuck, liquidation is a hedge. It is precisely because of the hedging mechanism that there is a saying of opening positions and closing positions. Opening and closing positions are just an explanation of the nature of your transaction. In finance, hedging means that one investment deliberately reduces the risk of another investment. This is a way to reduce business risks while still making profits from investment.

Then a simple intertemporal arbitrage is a hedging transaction.

Locking a warehouse is also a hedge.

If stock index futures are listed, you can also hedge futures and stocks to avoid risks. For a simple example, if you buy the Shanghai and Shenzhen 300 index stocks, you will be optimistic for a long time. However, any bull market has a moderate correction. You can't short stocks and don't want to sell them (for fear of losing favorable low-cost costs). Then you can short (sell) the appropriate IF stock index futures contract, and the amount is roughly equal to 10% of the amount of your long stock (the futures leverage is usually around 10%). When the stock market falls, if the stock index futures also fall. Although your profit on stocks has shrunk, you make money by shorting futures and make up for the shrinking stock profit. This is a risk hedge between stocks and futures.