What's the point of a 100% hedge?

[jono1887]

I've heard of 100% hedge's where you buy $X worth of stocks, and short the same amount in CFDs. Whats the point of this... no matter which way the stock moves, you won't be making any money. In fact, wouldn't you be loosing money from the brokerage and fees ect.

So why would you use a 100% hedge?

 

[skyQuake]

I've heard of 100% hedge's where you buy $X worth of stocks, and short the same amount in CFDs. Whats the point of this... no matter which way the stock moves, you won't be making any money. In fact, wouldn't you be loosing money from the brokerage and fees ect.

So why would you use a 100% hedge?

1. You are approaching the 1year holding period for the stocks and you are suddenly bearish. If you sell now you lose ur 50% discount, if you cfd hedge you can sell later.
2. You want to retain voting rights to the stock but do not want exposure
3. You are a douche
4. You want to participate to something like a SPP but do not want exposure to underlying.
5. In an illiquid issue, you spoof some size on the bid and short via cfd then pull your order

 

[johnnyg]

3. You are a douche

Hahahahaha. Simply yet Hilarious.

 

[springhill]

3. You are a douche

LOL... or you are a buttplug, opposite effects on the body..... but the same meaning