Hedging for Particular Share in the Lock-in Period by Using Stock Index Futures

Hedging is one basic function of stock index futures,as well as one of the most important functions.Stock index futures(a portfolio of several stock shares) working as a value-maintaining tool could also be used to maintain the value of particular share under the circumstance that the general market risk in China is high for the investors.The investor has gained expected rate of return,however,s/he cannot sell at a profit due to the share is still in the lock-in period.To prevent the loss,the investor can use stock index futures to maintain the value as a practical method.This paper analyzes such content as the shares which are suitable for the use of stock index futures,the ratio of the use of stock index futures,the actual amount of a short sale contract of stock index futures,and the extra cost etc.