DOI: 10.21276/sjpms.2018.5.3.1

Pages: 194-198

Futures, also known as futures contracts, is a type of financial instrument that trades at a futures exchange, buyers and sellers at a prescribed time, and delivers a certain quantity and quality in accordance with the conditions of the previously agreed transaction price, delivery method, etc. A standardized contract that can be listed for trading after approval by the regulatory authority. The most important thing in the futures market is to avoid risks, and hedging is the best measure to achieve this function. This paper takes aluminum futures as an example, analyzes the data through OLS and ECM models, explores the optimal hedging ratio, and better avoids risks.