Company Risk

[aquaswim47]

If you really like a company and want to eliminate market risk, one option is to short the S&P 500 index (SPY), Dow Jones Industrial Average (DIA) or Nasdaq (QQQQ). The cheapest way is to short either VTI or put a put option on VTI. If you think the global market will decrease, consider shorting IOO. If you think emerging markets will get hit, do EEM; that is more risky than any other short, especially if you short it rather than use a put option.

However, if you're wrong about a put option or short, it will cost you dearly in losses. So, it is very important to know where the market is headed and maybe, just maybe, you can eliminate (or reduce) market risk.

[StockJunkie]

After bernanke's speech this morning, the market has turned back north on strong buying. Granted, it was extremely oversold, which has only just fueled the fire today. Shorting the indices could be an easy way to hedge your risk in a given position. As well id suggest perhaps shorting the ETF tracking fund that follows the sector. Might make for better leverage.