Risk Management6 min read
Hedging CFD Positions: Reducing Risk Without Closing
Hedging lets you reduce risk without closing positions. Learn how to hedge with CFDs. Direct and correlation hedges explained, with the costs spelled out.
What Is Hedging?
Hedging: Opening an opposing position to reduce risk. Long EUR/USD + Short GBP/USD = partial hedge (correlated pairs). Or buy XAU/USD as a hedge against stock index shorts.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70-80% of retail investor accounts lose money when trading CFDs. Backtesting does not guarantee future results. Always consider whether you can afford the potential loss of your capital.