In other words, the drop in spot prices is good for you. However, in order to avoid the possibility of rising spot prices, it is still necessary to buy hedging in the futures market. If it does rise, the profit in the futures market can make up for the loss in the spot market.

Short position: Although the stock price is relatively high at present, investors are not optimistic about the stock market prospect and expect the stock price to fall, so they sell the stock at a relatively high price and buy it when the stock falls to a certain price to obtain the difference income. It is a truth to apply it in the spot market.

Long position means that investors are optimistic about the stock market and expect the stock price to be bullish, so they buy the stock at a low price and sell it when the stock rises to a certain price to obtain the difference income.

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