Hedging is a very complex and profound operation. In simple terms, there are the following types: 1. Hedging. Buying a foreign currency and shorting its forward futures. 2. Hedging of circular transactions. Buying a foreign currency while simultaneously buying a financial instrument whose price will rise due to a fall in the foreign exchange rate, or short selling a financial instrument whose price will rise due to a rise in the foreign exchange rate.

For example, when a country's currency depreciates, its stock price will rise. Therefore, when buying a foreign currency and buying the country's stocks at the same time, you can achieve the purpose of risk hedging