Currently there’s no way of hedging downside risk via options or short stock sales. Can we add some inverse ETF index tickers?
I think the problem here is that inverse ETFs empirically do not deliver over a long time period and so require constant monitoring and awareness of the markets.
Given the relatively low liquidity of inverse ETFs and the limited time scale over which a holding is useful it does not not really seem in keeping with the Freetrade vision for these to be added.
I agree with you that these types of trades are “tactical” in nature, however there isn’t any other way of protecting against downside risk on the platform at the moment, and this is a quick and easy fix for users whilst Freetrade works on building a better longer term solution
Gold, silver and long-term US treasury bonds were a very good protection during this crisis, as during almost any other?
Past performance isn’t indicative of future results. Many of those correlations have actually broken down recently
IMO it would be better for investors to be able pick and choose specific short ideas via inverse ETFs, whilst allowing them to stay invested in their high conviction long ideas
Which correlations broke down? Gold, silver, US treasuries and the USD did what consistently occurs during a crisis by appreciating?
Appreciate your feedback on the topic @hrochfor1, it sounds like your certainly more than comfortable hedging all of your long risk with just precious metals and treasuries (I’m not!)
As I said above I think there should be better options on the platform for users to tailor their risk management to specific indices/sectors depending on their portfolio composition
I’m comfortable with what works. You didn’t answer about which correlations have broken down?