Jump to content
House Price Crash Forum
Fully Detached

Spread Bet For Hedging

Recommended Posts

I don't often get down into this forum, but just read a post here suggesting use of a spread bet to hedge against HPI for example. I've heard of the concept before but never paid much attention to it.

Now, however, I like the idea of this - but need to gain some understanding as to how to go about it, and how to calculate the bet itself. And obviously, where is the best place to do it.

Any thoughts or opinions would be very welcome - happy to post specific details if necessary, but for now suffice to say that I'm 50% sterling (yes, I know) and 50% NS&I index linked certs.

So both HPI and RPI would be of interest to me here. Despite being all in Sterling I have no urge to get involved in currency related spread bets, after an eye opening demo month with GFT...

Share this post


Link to post
Share on other sites

I don't often get down into this forum, but just read a post here suggesting use of a spread bet to hedge against HPI for example. I've heard of the concept before but never paid much attention to it.

It's been posted here before.

If you buy an asset, you risk the asset losing value. That risk is minimised with liquid assets such as shares.

If you spread-bet, you take the same risk of the underlying assets losing value. But now there's a whole nother risk: your counterparty goes bust. Which can hit even if you're also losing the bet you were supposed to be hedging against.

Conclusion: you want to hedge against HPI, buy property-related shares that stand to benefit from it.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 200 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.