Hedging

As ASX Listed CFDs track dollar for dollar and cent for cent with the underlying, holding an opposing position in the CFD against what you hold in the underlying will offset any losses incurred.

A long (bought) share portfolio in Australian shares for instance can be hedged by holding a short (sold) position in ASX S&P/ASX 200 CFD.

ASX Index CFDs can be used to hedge an entire portfolio. 

It is important to ensure that your portfolio tracks the underlying index. For example a portfolio solely made up of Australian banks will not track the ASX S&P/ASX 200 Index. Your portfolio needs to be well diversified across a number of sectors.

ASX Listed CFDs Index hedging example

When short ASX Listed CFDs you receive CI less OIC
earning you an income over the holding period.