Three Steps to Hedging a Portfolio With Futures

Futures and futures options trading involves substantial risk and is not suitable for all investors. Certain requirements must be met to trade futures. Please read the Risk Disclosure Statement for Futures and Options before considering any futures transactions.

Futures accounts are not protected by the Securities Investor Protection Corporation (SIPC).

Read additional CFTC and NFA futures and forex public disclosures for Charles Schwab Futures and Forex LLC.

Futures and futures options trading services are provided by Charles Schwab Futures and Forex LLC. Trading privileges are subject to review and approval. Not all clients will qualify.

Charles Schwab Futures and Forex LLC (CFTC-registered Futures Commission Merchant and NFA Member) and Charles Schwab & Co., Inc. (Member SIPC) are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation.

Short selling is an advanced trading strategy involving potentially unlimited risks, and must be done in a margin account.

This material is intended for general informational and educational purposes only. This should not be considered an individualized recommendation or personalized investment advice. The investment products, investment strategies, current pricing and data mentioned will vary and are not suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decisions.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed.

All names and market data shown are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Actual pricing and data will vary.

Past performance is no guarantee of future results.

Investing involves risk, including loss of principal, and for some products and strategies, loss of more than your initial investment.

Hedging and protective strategies generally involve additional costs and do not assure a profit or guarantee against loss.

Schwab does not recommend the use of technical analysis as a sole means of investment research.