Hedging against dramatic market moves.
Topic: Hedging against dramatic market moves.
Recent market moves in China have been quite dramatic and of a nature that certainly can be turned into considerable profit. At the same time, moves like this can catch a trader off-guard and wipe out their portfolio. At 99 White Swans, we prefer to hedge heavily into events like this, protecting our portfolio, but also admittedly sometimes leaving some profit opportunity on the table. In the long run though, we believe that a good hedging strategy will always win out over the "fly-by-night" immediate profit seeking strategies. The thing with China, is that the move is based on strong fundamentals and is therefore likely to present many more opportunities, so watch this space...
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