haven't engaged in hedging before, and I'm interested in knowing if there are any risks I should be aware of before starting?
Hedging, yes or no?
- Thread starter eleanorK80
- Start date
What are you trying to hedge? can you be specific please? Options are used for hedging ( both on Equity and on Futures) also one can hedge a Futures position with another by converting it in to calendar spread but skill is when how and why!
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Sure .
Its used in 2 main ways, finance ;
1] Stocks[ETFs........ benchmarks like SPY.....] are a hedge against inflation
2] An offset, like an inverse or short against long position, but could lose on both.
777] Selling plan works well, take profits , let profits run+ cut losses.
Some times can work well , but countertrends+ trends differ so much;
countertrends can have unlimited losses , cash longs could only lose 100%\ worst case
888] I never hedge in my cash metals business but do sometimes in ETFs.
Can have its uses given the right context.
nothing rather than that you should consider hedge trade also includes a spread, do not forget to take that into your consideration.