Hedging is to close the original buying (or selling) contract by selling (or buying) the foreign exchange futures contract within the same delivery month before the expiration of the foreign exchange futures contract, that is, the short seller of the foreign exchange futures contract buys from the long seller or sells the long seller to the short seller. Sometimes hedging is also called hedging.

The so-called hedging transaction is to replace spot trading with foreign currency futures contracts to offset the losses caused by actual or expected exchange rate risks in spot trading. This definition is based on the risk of a trader's foreign currency assets due to actual or expected price changes. It can also be seen from this definition that there are two kinds of hedging transactions: one is to hedge the existing spot position; The second is to hedge the recent spot position.