The meaning of net exposure hedging is the net exposure hedging income. In many hedging businesses, accounting confirmation and accounting results are often inconsistent. Net exposure hedging can help us achieve the goal that the profit and loss of both parties can be recognized at the same time in the hedging period.

Net exposure hedging is not a contract, nor is it stipulated by law, but is only aimed at hedging the fluctuation of the value of both parties. When the net exposure hedging is revised and the confirmation rating is different, the net exposure hedging can already realize the deferred confirmation of the profit and loss of Fannie and Freddie.

The meaning of hedging mainly refers to the risk exposure caused by enterprises in order to manage specific risks such as foreign exchange risk, interest rate risk, price risk and credit risk. The designated financial instrument is a hedging instrument, which is a risk management activity that is expected to offset all or part of the fair value or cash flow changes of the hedged item according to the fair value or cash flow changes of the hedging instrument, such as hedging with commodity futures, hedging with foreign currency option contracts signed by banks, etc.