What does delivery mean in futures? What does hedging mean?

There are generally two ways to close a commodity futures transaction (i.e., close a position), one is to hedge the position; the other is physical delivery. Physical delivery is to fulfill the responsibility of futures trading with physical delivery. Therefore, futures delivery refers to futures trading buyers and sellers in the expiration of the contract, the respective holdings of the

expiration of open positions according to the provisions of the exchange to fulfill the physical delivery, the end of their futures trading behavior.

Hedging (hedge), refers to the futures trading behavior for the purpose of avoiding the risk of spot price fluctuations. One of the basic economic functions of the futures market is its price risk avoidance mechanism, and to achieve this purpose is the means of hedging transactions. Traditional hedging refers to the production operators in the spot market to buy or sell a certain amount of spot commodities at the same time, in the futures market to sell or buy the same varieties of spot, the number of comparable, but the direction of the transaction is opposite of the futures commodity contracts, a market profit to make up for the loss of another market, to avoid price fluctuations in order to achieve the purpose of the risk.