The so-called hedging means that in order to avoid or reduce risks, a position opposite to the spot market is established in the futures market, and hedging is carried out before the futures contract expires to settle the position. Specifically, it is to conduct two transactions in the spot market and the futures market at the same time, that is, to buy the spot and sell the same number of futures contracts in the futures market (this is called selling hedging); Or buy the same number of futures contracts in the futures market while selling the spot (this is called buying hedging). This trading method can avoid or reduce risks because futures prices and spot prices generally move in the same direction. After a trader establishes a position opposite to the spot market in the futures market, if the price changes, he will inevitably lose money in one market and gain money in another market. The profit and loss caused by price changes in spot trading will be offset by the losses and profits in futures trading, thus achieving the purpose of maintaining value.