Soybean hedging case

Selling hedging example: (This example is only used to illustrate the hedging principle. In the specific operation, transaction fees, position fees, Delivery costs, etc.)

In July, the spot price of soybeans was 2,010 yuan per ton. A certain farm was quite satisfied with the price, but the soybeans could only be sold in September, so the unit was worried that the spot price might fall by then. , thereby reducing revenue. To avoid the risk of future price drops, the farm decided to trade soybean futures on the Dalian Commodity Exchange. The transaction situation is shown in the following table:

Spot market futures market

The July soybean price is 2010 yuan/ton and 10 September soybean contracts are sold: the price is 2050 yuan/ton

Sell 100 tons of soybeans in September: the price is 1980 yuan/ton. Buy 10 lots of September soybean contracts: the price is 2020 yuan/ton

The arbitrage result is a loss of 30 yuan/ton and a profit of 30 Yuan/ton

The final result is net profit 100*30-100*30=0 yuan

Note: 1 lot = 10 tons

From this example, we can It follows: First, a complete sell hedge actually involves two futures transactions. The first transaction is to sell a futures contract, and the second transaction is to sell the spot in the spot market and simultaneously buy the position originally held in the futures market. Second, because the trading order in the futures market is to sell first and then buy, this example is a selling hedging. Third, through this hedging transaction, although the spot market price has changed unfavorably for the farm, the price has dropped by 30 yuan/ton, resulting in a loss of 3,000 yuan in income; however, the transaction in the futures market has made a profit of 3,000 yuan. , thus eliminating the impact of adverse price changes.

Buy hedging example:

In September, an oil factory estimated that it would need 100 tons of soybeans as raw materials in November. At that time, the spot price of soybeans was 2,010 yuan per ton, and the oil factory was quite satisfied with the price. It is predicted that soybean prices may rise in November. Therefore, in order to avoid the risk of rising raw material costs due to future price increases, the oil factory decided to conduct soybean hedging transactions on the Dalian Commodity Exchange. The transaction situation is as follows:

Spot market futures market

September soybean price is 2010 yuan/ton. Buy 10 November soybean contracts: the price is 2090 yuan/ton

Buy 100 tons of soybeans in November: the price is 2,050 yuan/ton. Sell 10 soybean contracts in November: the price is 2,130 yuan/ton.

The arbitrage result is a loss of 40 yuan/ton and a profit of 40 yuan/ton. tons

The final result is a net profit of 40*100-40*100=0

It can be concluded from this example: First, a complete buy hedging also involves two transactions Futures trading. The first transaction is to buy a futures contract, and the second transaction is to buy the spot in the spot market and sell it in the futures market to hedge the original position. Second, because the trading order in the futures market is to buy first and then sell, this example is a buy hedging. Third, through this hedging transaction, although the spot market price has changed unfavorably for the oil plant, the price has increased by 40 yuan/ton, and the cost of raw materials has increased by 4,000 yuan; however, the transaction in the futures market has been profitable. 4,000, thereby eliminating the impact of adverse price changes. If the oil factory does not engage in hedging transactions, it can obtain cheaper raw materials if the spot market price falls, but once the spot market price rises, it must bear the resulting losses. On the contrary, he did hedging by buying in the futures market. Although he lost the profit from the favorable changes in the spot market price, he also avoided the loss from the unfavorable changes in the spot market price. Therefore, it can be said that buying hedging avoids the risk of price changes in the spot market.

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