How do I use CFDs to hedge my portfolio?

Hello Sam,

In addition to chasing speculative gains, CFDs also reduce market risks. Hedging entails the protection of a single position or your entire investment from adverse price movements. By assuming a matching but opposite position, hedges create neutral conditions to offset price changes.
Being a geared product, a CFD’s leverage cushions a stock’s position while minimizing its upfront costs. CFDs enable you to tailor short positions to exact share sizes. Suppose you want to keep a particular company’s stock in the long run despite sensing short-term price vulnerability.
If you own 1,000 shares, CFDs allow you to short an equal number of stocks to cancel the risk exposure in equity. If the hedge is accurate, you can get your short position at a lower cost and the profit will balance your physical shareholding’s paper loss. Your CFDs won’t change if the stock’s value doesn’t change. So to say, you can repurchase the CFDs you initially unloaded to hedge your status.