Hedging a portfolio with futures

Protection without selling

Professional - Gold & Platinum

In this lesson

Calculate a hedge size using beta or a hedge ratio, and understand the costs and trade-offs of hedging.

Key takeaways

Full hedge size ≈ portfolio value × beta (for stock portfolios with index futures).
A partial hedge (e.g. 50%) reduces both losses and gains in proportion.
Costs: funding/basis, margin requirements, and lost upside.
Decide why, how much and when you'll remove the hedge before placing it.

Watch this lesson with Tessa. The full video, worked example, calculator, quiz and Ask Tessa are part of Money Globe X Gold and Platinum. Create your account to start learning.

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Educational information only - not financial advice.

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