Going long and shorting the same variety at the same time is called hedging or locking.

The intuitive effect of locking is that the floating profit and loss of positions in both directions will offset each other, thus reducing the risk exposure of the account. For example, an import company ordered a refrigerator production line in Japan.

The price quoted by Japan is 1 200 million yen, and1USD 120 yen is equivalent to10 million USD. Import companies are worried that the yen will appreciate sharply in the future settlement, and the actual price may become11million dollars or even12 million dollars. Therefore, when signing a contract with Japan, it immediately purchased Japanese yen futures equivalent to 1 0/0/20 USD at the bank. In this way, even if the yen appreciates sharply in the future, the extra dollars paid for delivery to the production line can be recovered in the yen futures contract without losing the budget. This practice is hedging.

In finance, hedging means that one investment deliberately reduces the risk of another investment. This is a way to reduce business risks while still making profits from investment.