CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

What is hedging with CFDs?

Hedging with CFDs is a risk management strategy where a trader opens a new position in the opposite direction of an existing trade. The goal is to reduce potential losses if the market moves against the original position.

While hedging can help manage risk, it does not eliminate the risk of loss entirely, especially in volatile markets. Traders should understand the costs and implications of holding multiple positions and using leverage.

If you have a buy (long) position on an underlying asset, expecting its price to go up, but you believe that the price might temporarily fall, you could open a sell (short) CFD position on the same underlying asset. This may help limit the impact of short-term losses if the market moves against your original trade.

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Risk Warning and Disclaimer

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Be Aware: You can lose all, but not more than the balance of your Trading Account. These products may not be suitable for all clients therefore ensure you understand the risks and seek independent advice. This material does not constitute an offer of, or solicitation for, a transaction in any financial instrument. Fortrade accepts no responsibility for any use that may be made of the information and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information, consequently any person acting on it does so entirely at their own risk.

The information on this site is not directed at residents of the United States or Belgium and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

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