The experience of textile companies makes people regret

Luo Qiang, deputy general manager of the Research Department of Guangzhou **, said that if textile companies adopt hedging methods, they will not suffer such large losses in this round of price fluctuations. For example, he said that if a textile company buys cotton at a high position, if it is worried that the price of cotton will fall, it will be able to sell short the same amount of cotton in the market. Once the cotton price falls, although the stock is damaged, but the market is benefiting, which can compensate for the loss.

The experience of textile companies makes people feel sorry for themselves. They cannot help but ask: Why not use the ** market for hedging? The former executives of Hong Kong's Yangtze River Garment Group admitted: The use of hedging in textile companies is relatively small, and only a few large companies have adopted it.

“Hedging” refers to the use of **contracts as a venue for transfer of price risk, using **contracts as a temporary substitute for future purchases and sales of goods in the spot market, and the sale of goods after it is ready to buy or for the future. Need to buy the price of goods for insurance transactions.

Luo Qiang, deputy general manager of the Research Department of Guangzhou **, said that if textile companies adopt hedging methods, they will not suffer such large losses in this round of price fluctuations. For example, he said that if a textile company buys cotton at a high position, if it is worried that the price of cotton will fall, then it can sell the same amount of cotton in the market. Once the cotton price falls, although the stock is damaged, but the market is benefiting, which can compensate for the loss.

** The role of the market is to reduce the impact of price surges and plunges on the normal operations of companies. Luo Qiang believes that this round of price fluctuations will certainly educate a group of companies.

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