Based on the stock index, stock index futures can not only provide effective hedging tools for stock investors, but also provide experience for the timely introduction of financial derivatives such as foreign exchange futures in the future, which is of great significance to the development of the stock market. Using stock index futures to hedge the stock index and its stocks can effectively avoid the risks caused by stock index fluctuation and price fluctuation in the stock market. The timely introduction of stock index futures will play an important role in promoting the development of China's capital market. Generally speaking, futures trading has two functions: one is price discovery function, and the other is hedging function. As a kind of financial futures, stock index futures also have two functions: price discovery and hedging.

The so-called short-selling mechanism simply refers to futures trading based on stock index futures and stock futures. According to the trading system, investors can sell stocks without actually holding them, and then buy them within the agreed time limit. If the stock price shows a downward trend, investors can make a profit in the process of selling first and buying later. Therefore, once the short-selling mechanism is implemented, investors can directly make profits in the process of stock market decline, which is essentially different from the fact that they can only make profits in the process of stock market rise.

There is no short selling mechanism in China stock market, which is a unilateral market. Only by doing more can you make money. In other words, you can only participate if you go up, and you can't participate if you go down. Therefore, you can't make money by shorting, so you have to leave. Otherwise, if you participate in the short market, you will definitely lose money. So "fishing for three days and drying the net for two days" is the characteristic of China stock market. Only by learning to short can you become a mature China stockholder. To short the China stock market, you must own a stock. If you judge that the stock will fall, sell it and buy it at a low level. If the stock doesn't go up, you can't make money. Therefore, shorting the China stock market may not be profitable, but can only be regarded as a way to avoid losses. Therefore, when shorting, selling at a high level does not necessarily mean buying at a low level. It should be said that this is not short in a strict sense. In international short selling, you don't have to hold stocks. If you judge that the stock will fall, you can sell it first, and then you must buy the same amount of stock at a low level, so that you can earn the difference and make a profit. If the stock rises instead of falling, you must also buy at a high level, so you will lose money. It can be seen that China's short selling is a way to avoid risks and preserve performance, not a way to make money.