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- 25 May 2006
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I would like an opinion from an experienced Trader/Investor or 2, with regard to the most efficient and cost effective method to preserving my capital over a period of around 2 to 3 weeks. I will try to keep it short:
My personal opinion is, late Janurary, early February, will be a risky time to hold stock. The reason for my concern is two fold:
1. The lifting on the ban on shorting Financials. (Will it happen, or will they extend the ban? Surely bad for Hedge Fund liquidity.)
2. Reporting season in the US. (God only knows what dissappointments may be in stall for us here
)
Over the last few weeks I have been accumulating some stock after a long break away from the market.
To my delight, I have picked up 10% gain on the stock. The portfolio of around 15 stock comprises a few Blue Chips, Mids Cap, and Specks. Each only 25% of my desired holding.
I am considering using a CFD short position, to hedge my gain during this period.
My question is: Would it be better to use something like the AUS200 Index: My reasoning here is even if the index falls 10%, the quality of my shares tend to be less affected as they are more recession proof. You could maybe even look at this as a pairs trade, or:
Considering I am only holding 15 stock, would it be more prudent to short the individual stock and forgo the $300 buy/sell cost, but ensure capital preservation? My only problem here is I can't short the Speckies. (About 4)
Either way, I would like to hold all the stock, and purchase my next 25% on the next pullback, meanwhile hold my gain.
I don't think I am getting a bit precious, 10% gain is nice gain!
Much appreciate your help. While I am up to speed with CFD's, I know nothing about put options yet, so CFD's seem quick fix for me.
My personal opinion is, late Janurary, early February, will be a risky time to hold stock. The reason for my concern is two fold:
1. The lifting on the ban on shorting Financials. (Will it happen, or will they extend the ban? Surely bad for Hedge Fund liquidity.)
2. Reporting season in the US. (God only knows what dissappointments may be in stall for us here
)Over the last few weeks I have been accumulating some stock after a long break away from the market.
To my delight, I have picked up 10% gain on the stock. The portfolio of around 15 stock comprises a few Blue Chips, Mids Cap, and Specks. Each only 25% of my desired holding.
I am considering using a CFD short position, to hedge my gain during this period.
My question is: Would it be better to use something like the AUS200 Index: My reasoning here is even if the index falls 10%, the quality of my shares tend to be less affected as they are more recession proof. You could maybe even look at this as a pairs trade, or:
Considering I am only holding 15 stock, would it be more prudent to short the individual stock and forgo the $300 buy/sell cost, but ensure capital preservation? My only problem here is I can't short the Speckies. (About 4)
Either way, I would like to hold all the stock, and purchase my next 25% on the next pullback, meanwhile hold my gain.
I don't think I am getting a bit precious, 10% gain is nice gain!
Much appreciate your help. While I am up to speed with CFD's, I know nothing about put options yet, so CFD's seem quick fix for me.
