Hedging, simply speaking, futures and spot hedging is hedging, and at the same time, the futures market and spot market are traded in the same amount but in the opposite direction, so as to achieve the purpose of hedging.

The prime minister should understand that hedging is only effective when futures and spot are carried out at the same time. For example, he made an appointment to buy iron ore in May1February, and worried that price fluctuations would affect profits, he hedged in the futures market.

If you want to hedge, you must buy the iron ore futures contract that expires in1February in May, and the buying time and expiration time are close to ensure hedging (the price trend in the futures market is roughly the same as that in the spot market).