Hedging your bets

[It's Snake Pliskin]

Hedging as a risk management strategy has pertinent factors that one must be aware of. Though, what would the most pertinent factor be as you see it?

 

[It's Snake Pliskin]

Hedging as a risk management strategy has pertinent factors that one must be aware of. Though, what would the most pertinent factor be as you see it?

Money management.

 

[NettAssets]

I don't know quite what you are asking here Snake, but surely you have this back to front .
"Hedging a bet" is one factor in money management not the other way round.
The most "pertinent factor" that I can see is the degree to which hedging limits your gains. This is especially true when interest rates are rising and your costs of carry can exceed the (limited) upside even though the hedge is protecting you from disasterous downside losses.
NA

 

[It's Snake Pliskin]

I don't know quite what you are asking here Snake, but surely you have this back to front .
"Hedging a bet" is one factor in money management not the other way round.
The most "pertinent factor" that I can see is the degree to which hedging limits your gains. This is especially true when interest rates are rising and your costs of carry can exceed the (limited) upside even though the hedge is protecting you from disasterous downside losses.
NA

Nett,

It`s good to have you comment.

Yes maybe it is back to front, but thinking out of the norm is rewarding, some should try it a bit more often - I haven`t been spoon fed for a few years now, though some would love to see me back on the spoon

Are you sure you are not confusing money management with risk managment? Or do the two coalesce? (another discussion) I see your point and offer no resistance to it.

Your comment above, and no spin intended:

the hedge is protecting you from disasterous downside losses.

Manage risk or limit it. So if risk is minimised, or negated, by hedging surely it could be further minimised with efficient money management - position sizes relevant to the long and short sides.

Page 7, Van Tharp`s special report on Money management states:

"Money Management is that portion of your trading system that tells you "how many" or "how much."

Snake

 

[Bobby]

I'd like to place a GSL on an overnight SPI ~ CFD trade, but have you seen some CFD providers rules on this

Bob.

 

[It's Snake Pliskin]

I'd like to place a GSL on an overnight SPI ~ CFD trade, but have you seen some CFD providers rules on this

Bob.

So Bob, basically it amounts to inferior risk managment. Choosing brokers should be a major consideration for most.

Have a good night.
Snake

 

[Bobby]

So Bob, basically it amounts to inferior risk managment. Choosing brokers should be a major consideration for most.

Have a good night.
Snake

Yes Snake,

Hedging is like taking out insurance, you pay for it.
Every angle has been looked at played at & tried ?

What anoys me is that you need to read deep into every PDS to find truth !

Regards
Bob.

 

[coyotte]

I use CFDs to HEDGE a stock only when its like it's liable to turn opposite to the position I currently have .

You may loss out on a bit of profit -- but that's the cost of insurance .

I also use LHG as a SHORT hedge to POG on a 1 :3 ratio , again only when POG is starting to top

Cheers