Avoiding risks is hedging for units or enterprises.
Individual investors participating in futures trading is speculation.
Then why can we avoid risks? This is related to the spot market, that is, traditional market transactions in the general sense (cash on delivery).
The main problem faced by merchants in the traditional market is that the market depression causes unsalable and overstocked goods, which affects commodity prices or leads to economic losses. For merchants, it is a one-sided market (bullish and profitable)
Because the trading rules of futures itself can be used for long or short trading of commodities, merchants can use this rule to trade futures against the current price of commodities, realize risk hedging, and ensure that commodities will not suffer from price decline and lead to losses in the spot market.