Before hedging, the hedging period and exposure must be determined. 1. Foreign exchange risk is the sum of exchange rate pricing risk and holding foreign exchange assets risk. To hedge foreign exchange, we must first determine the foreign exchange pricing gains and losses of foreign exchange trading, which is pricing risk; 2. Holding a bank draft is actually an option. During the holding period, there will be gains and losses due to changes in the exchange rate of the bill; 3. Therefore, the former is the hedging of fair value change, the latter is the value accounting profit and loss of a right or debt, and the latter is the hedging of cash flow during the hedging accounting period.