A hedging transaction is

when you hold multiple orders or empty orders of a kind, such as when you hold stocks.

If you are worried that the stock will fall, but you don't want to sell it, you can hedge it by holding the corresponding empty and multiple stock index futures

In this way, the stock index futures will make money, but the stock index futures will lose money, and the basic profit and loss will be written off

Generally, individuals rarely use hedging, only when the mechanism of China stock market is not fully mature will they hedge

. So what are the current China stock market hedges?

1. Stock index futures:

At present, the stock index can be used as the hedging target of the stock. At present, there are three targets for the stock index, namely, Shanghai and Shenzhen 3 Stock Index Futures (IF), CSI 5 Stock Index Futures (IC) and SSE 5 Stock Index Futures (IH). Moreover, the threshold for opening an account can only be operated with 5, funds. When the stocks bought fall due to market factors, institutions or large capital customers can hedge through stock index futures to reduce the losses caused by the stock decline. However, the threshold for opening an account of 5, yuan is relatively high, so for many ordinary investors, this condition is relatively high, and there is no hedging. However, at present, many institutions of stock index futures will still adopt this method.

2.5 ETF:

5 ETF option is also the target used for hedging in the current market. The condition for opening an account for individual stocks should reach 5,, and institutional investors should have 1 million, and they should be fixed for more than 6 months and have experience in margin financing and securities lending; Or open an account in a futures company for more than 6 months of futures trading experience. SSE 5ETF can hedge by buying short and buying long to prevent the risks caused by uncertain factors in the stock market. However, these account opening conditions are relatively high and complicated for ordinary investors, so the hedging mechanism is rarely used at present, except for institutional investors.

Therefore, the current hedging mechanism is not applicable to us ordinary investors, and the relevant hedging mechanism will be gradually opened after the securities and financial market in China matures.

The hedging of stocks is to buy stocks and sell stock index futures at the same time, so as to realize the risk hedging mechanism. If stocks fall, stock index futures can make money and balance risks and returns. If the stock goes up and the stock makes money, the stock index futures may lose money, which can also achieve a balance between risk and return. Hedging is to avoid the risk of doing more in one direction and balance the risk and return better, which is an investment strategy often used by many institutional investors.

the above answers come from Baidu, I hope I can help you.