Hedging

Hedging is a strategy that allows you to reduce the risk of negative price movements in your portfolio. Hedging refers to opening an equal but opposite position to offset any short term price movements in your physical shares.

If you hold shares in your portfolio that you wish to protect from a potential negative price movement you can open an equivalent short CFD position to protect their value. If the CFDs are bought back after a decline, then the profit achieved from the CFD trade should offset the loss incurred on your physical shares.

CFDs are a flexible and cost effective way to protect the value of your physical shares while retaining your holdings and without incurring a CGT liability.
 

 
 

 

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The information in this website has been prepared without taking into account your personal objectives, financial situation or needs. You should consider the information in light of your objectives, financial situation and needs before making any decision about whether to acquire or dispose of any financial product. A Product Disclosure Statement for each of the financial products available from First Prudential Markets can be obtained either from this website or on request from our offices and should be considered before entering into transactions with us. Derivatives can be risky; losses can exceed your initial deposit. First Prudential Markets recommends that you seek independent advice from an appropriately qualified person before deciding to invest in or dispose of a derivative. First Prudential Markets Pty Ltd (ABN 16 112 600 281, AFS Licence No. 286354).