RE: Form 8.523 Oct 2020 14:40
Hi Mac
Apologies - correcting myself:
"For example, a popular trading strategy, and a useful one in turbulent times, uses a hedge to protect a single share position with a CFD. Imagine, for example that you hold physical shares in a company and feel that its share price is vulnerable IN THE SHORT TERM, BUT YOU STILL WANT TO STAY INVESTED IN THE LONG RUN. If you hold 5000 shares of the company, you will be able to hedge the risks through CFDs by short selking 5000 shares CFDs to account for the risk exposure fir that particular investment in equity. If this hedge is correct, you will be able to buy your short CFD position at a lower price level and the profit achieved on your CFD will offset the PAPER LOSS on your physical shareholding ".
All makes sense now