General Category > Strategies

Hedging exposure

(1/4) > >>

Looking for some help hedging my long (tech) exposure, as Iím totally new to shorting/hedging. Donít want to sell because of tax reasons. Iím on Interactive Brokers.

For example I own GOOG. If I wanted to hedge this position I should be able to sell GOOGL, right?

I own names like GOOG, FB, AMZN.
Iím thinking shorting the Nasdaq to hedge some of my exposure. How would I do that? Is there a simple way to go short the index?

I'm sure you could get more specific with ETF's but it sounds like you are looking to short the QQQ, a very liquid exchange traded fund that tracks the Nasdaq 100 index.  I would check with an advisor on the tax legitimacy of using a GOOGL short to hedge a position in GOOG.  It is possible you could get into trouble in the same account.

- look into "constructive sale" rules on substantially identical securities

John Hjorth:

If I remember correctly, you're Danish :

Kursgevinstbeskatningsloven, chapter 6 - Financial Contracts.

[In short, gains [and losses] from financial contracts are taxed separately, and not as part of your "Aktieindkomst" [Translated to English : Income from stocks]].

Selling short or buying put options on GOOGL as a way to hedge a long GOOG position would probably be considered a constructive sale (i.e. no different than if you just sold GOOG).

You should look for tech-focused ETFs that closely track GOOG, something like XLK, VGT, IYW, FTEC...

Thanks all - appreciate your answers.

John Hjort:
Yes, Danish --- I really need to do more reading, but from the outset it seems shorting individual stocks is out of the question, because of tax regulations. (profits are taxed highly and losses are only deductible towards profits from other shorts)

Do you have you any experience hedging (shorting) with regards to DK tax regulation?


[0] Message Index

[#] Next page

Go to full version