Hedging payment means that investors conduct opposite transactions in the spot and futures markets to prevent price changes under adverse circumstances. In order to control the exposure caused by specific risks such as foreign exchange risk and price risk, the company sets up financial instruments as hedging payment tools to change fair value or cash flow, which is expected to offset all hedging payment items or risk control activities of changes in fair value or cash flow.

Hedging,

The significance of hedging is to use the futures market as a place for mobile price risk, and use futures contracts as stage substitutes for commodities traded in the spot market in the future, so as to conduct insurance trading activities on the prices of commodities to be sold now or to be purchased in the future.

hedging is used in the principle of equality and relativity. Commodities traded in futures should be consistent with the types or quantities of commodities traded in the spot market, and relatively risky spot transactions should be selected for hedging.