Hedge your physical portfolio with CFDs
If you already have a real stock portfolio through other brokers and believe it will lose value in the short term, you can hedge your real stocks with CFDs. By shorting the same stocks in CFDs, you can try to profit from a short-term downtrend and offset any losses in your existing portfolio.
For example, let's say you have $5,000 worth of ABC Company shares in your portfolio; you can short sell an equal amount of ABC Company shares through CFDs. Subsequently, if ABC Company's share price falls in the underlying market, the loss in value of your real stock portfolio may be offset by the profit made from the CFD short sale. You can then close the CFD trade, profiting from the short-term downtrend in the stock market, while the value of your real stocks will rise again if the stock market starts to rise.
Hedging a real stock portfolio with CFDs is a common strategy used by many investors, especially in volatile markets.
If you already have a real stock portfolio through other brokers and believe it will lose value in the short term, you can hedge your real stocks with CFDs. By shorting the same stocks in CFDs, you can try to profit from a short-term downtrend and offset any losses in your existing portfolio.
For example, let's say you have $5,000 worth of ABC Company shares in your portfolio; you can short sell an equal amount of ABC Company shares through CFDs. Subsequently, if ABC Company's share price falls in the underlying market, the loss in value of your real stock portfolio may be offset by the profit made from the CFD short sale. You can then close the CFD trade, profiting from the short-term downtrend in the stock market, while the value of your real stocks will rise again if the stock market starts to rise.
Hedging a real stock portfolio with CFDs is a common strategy used by many investors, especially in volatile markets.