In the commodities market, to protect harvest results or business profits, farmers and investors use Hedging by taking Long (Buy) or Short (Sell) positions.
Short selling in coffee allows you to 'lock in' a high selling price today for delivery in the future. If the market price drops, your derivative profit offsets the physical bean's loss in value.

Risk management on the commodity derivatives market.
Stoploss is the survival discipline in trading. The Risk/Reward ratio helps you calculate how many dollars you stand to gain for every 1 dollar at risk. An ideal R/R is typically 1:2 or 1:3.
Open Interest (OI) is the total number of outstanding derivative contracts, such as futures or options, that have not been settled. Unlike trading volume, OI indicates cash flow strength. When prices rise with increasing OI, new money is eagerly backing the trend.
Never open a derivative position without a Stoploss in place. Use the Risk/Reward calculator above to ensure one winning trade can offset two losing trades.