Recently I bought a fair chunk of FMG at 246, but my impatience may be such that I went in too early. Particularly if the present global sell off accelerates. Normally in this scenario, if FMG does continue down, I would simply cut out and take the loss. However, this approach can result in selling at the bottom and missing the rebound. Hence, an alternative option that I am considering is hedging, but what method to use to hedge? My first thought is to simply short RIO as both FMG and RIO are iron ore stocks. Alternatively, I could buy an inverse materials ETF, or short an index. But which ETFs and indices I have not ascertained.
Anybody else hedging during this present market and what hedging method are you using?
