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hedging and cfs

D

dimitris13

Member
hi ,
it mentions that if we are due to sell an asset we can hedge this with entering a short futures position. then it says at the end that we close the position by emtering a long one.
1. is it possible to explain me the steps using some example including "actual" cfs?
2. why chose to close out the position ?

thanks
 
Hi
A good example of closing out a position is in chapter 2 page 6. A trader would close out a position when he or she no longer wants the exposure from that trade, but there would be many real world situations when a trader might decide that an exposure should be closed.
 
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