Portfolio Diversification and Hedging: How the Futures and Options Markets Can Be Used to Hedge Asset Risk and Diversify a Traditional Portfolio

The futures markets were created to enable commodity end-users and producers to shift their price risk to speculators. However, investors in traditional assets such as stocks and bonds can efficiently shift portfolio risk to speculators via hedging strategies.

The futures markets also provide an efficient opportunity for diversifying a portfolio via asset classes such as gold and silver without the hassle of handling the physical metal or incurring storage and shipping costs. Further, those looking for an aggressive form of diversification might consider a managed futures program.

Come learn about the various hedging and diversifying tools offered by futures and options.