From the Dealing Desk: Portfolio Hedging with CFDs

With economic and geopolitical events taking place around the world that are beyond our control and extraordinary by nature, we have been fielding many questions from clients about how they can temporarily immunise their portfolio returns from what they might feel is a period of likely volatility. 

 

Naturally a client can sell his or her entire portfolio in order eliminate exposure to market returns for a desired period of time; however, depending on the size of a portfolio, this can become a very expensive exercise, while occasionally impractical due to options positions, and deregistering your holdings temporarily can spell a whole lot of junk mail from the public companies you own part of and the registries that handle your ownership details.  In addition, placing a hedge over your portfolio means that you do not need to realise profits/losses on your share positions prematurely; this can make a huge difference, depending on your tax situation.

 

For this reason, today’s From the Dealing Desk will instruct you on how you can implement a strategy that aims to ‘hedge’ your portfolio by eliminating negative and positive returns for any length of time that you desire.