Selling hedging is a kind of trading method to sell contracts with the same spot quantity in the futures market in order to prevent the risk of spot price falling during delivery. Usually when farmers try to stop harvesting, crop prices will fall; The mine mainly prevents the price from falling after mining; A hedging method used by traders or processors to prevent the price of goods from falling when they are bought but not sold.

For example, during spring ploughing, a grain enterprise signed a contract with farmers to buy 65,438+00,000 tons of corn at harvest. In July, the company was worried that the price of corn would fall when it was harvested, and decided to lock the price at 1080 yuan/ton, so it sold 1000 yuan/ton in the futures market.

At harvest time, the price of corn really dropped to 950 yuan/ton, and the company sold the spot corn to the feed factory at this price. At the same time, the futures price also fell to 950 yuan/ton, and enterprises repurchased 1 1,000 futures contracts at this price to hedge their positions. The 1.30 yuan/ton earned by the enterprise in the futures market is just used to offset the part that is undercharged in the spot market. In this way, they hedge to avoid the risk of adverse price changes.

Purchase hedging

Buying hedging means that traders buy futures in the futures market first, so that they will not cause economic losses when buying spot in the spot market in the future. This practice of hedging the losses in the spot market with the profits in the futures market can fix the forward price at the expected level. Buying hedging is a common hedging method for investors who need spot but are worried about rising prices.

Selective hedging

In practice, the main purpose of futures market hedgers is to increase profits, not just to reduce risks. If they think hedging inventory is the best way to take action, then they should take action accordingly. If they think that only partial hedging is enough, they may only hedge some risks. In some cases, if they have confidence in the judgment of future price trends, then they can expose all risks without taking any hedging action.

Feed enterprises own soybean meal from the spot purchase and sale contract of soybean meal to feed sales. Once the contract price is determined, risks will follow. This is because the market price is constantly changing, and enterprises will lose money if the price falls. After signing the spot contract, the purchasing manager is worried about the price drop, but in order to meet the needs of factory production, there must be some inventory. What should I do at this time? The futures market can help you. You can do selling hedging in the futures market to avoid price risk and sell inventory (spot purchase contract). If a feed enterprise buys soybean meal at a price of 2050 yuan/ton, and the processing and sales period is 3 months, then the enterprise is worried about the price drop and should do selling hedging in the futures market.

Another function of selective hedging is to lock in speculative profits. Suppose a feed enterprise orders spot soybean meal at the price of 1980 yuan/ton in March, and the delivery time is three months later. He is convinced that this price is relatively low, and it is expected that the price of soybean meal will rise after 1 month. In April, the price of soybean meal rose to 2 180 yuan/ton, which was considered too high by processing enterprises. He speculated that the price of soybean meal would fall to 2060 yuan/ton. Assuming that his prediction is completely accurate, if he keeps the original spot contract and there is no change in the middle, he will eventually get a net profit per ton of 80 yuan. In fact, he earned 200 yuan/ton first, and then lost 120 yuan/ton. In a flexible hedging scheme, he can sell soybean meal futures at the price of 2 180 yuan/ton to hedge the spot soybean meal contract and earn 200 yuan/ton. Enterprises sell soybean meal futures hedging through the futures market, and lock in profits on the premise of retaining the spot control of soybean meal.

Whether, when and how much the raw material inventory needs hedging is based on the comprehensive judgment of the purchasing manager on the market price and price trend. Compared with futures speculation, hedging is indeed much more complicated. First of all, spot enterprises must hedge according to their own production and operation needs, and cannot confuse hedging with speculative trading; Secondly, it is necessary to strictly control the trading volume of futures, which cannot exceed the range that enterprises can bear; Third, it is necessary to formulate a detailed hedging plan and operation scheme, in which factors such as basis difference, seasonality and variety characteristics are fully considered. In addition, before you start hedging, you should attend a hedging training class, or find some in-depth teaching materials to read and learn more about hedging operations.