Identifier: C3T4L2 · Revision: 2026-10-26 · Classification: domestic

Decision and objectives

Match a share position to standard or adjusted futures units. The decision record must connect the exposure, cash dates and implementable contract, rather than stop at a favorable price forecast.

By the end, you can match a share position to standard or adjusted futures units; separate issuer, dividend and corporate-event exposure; quantify the remaining position after a partial hedge.

Prerequisite: C3T4L1; completed Classes 1 and 2 and the Stock Market School foundation or Forex School foundation. All cases below are hypothetical; their prices, costs, rates, dates, contractual assumptions and collateral amounts are teaching inputs, not current offers.

Mechanics

A single-stock future refers to one issuer but its price still reflects carry, distributions and contract adjustment rules. A short future against owned shares reduces price exposure if quantities match. The cash shares retain voting and distribution rights while the derivative has its own settlement obligation. Physical delivery can make a matched hedge operationally useful, but the owned shares must be unencumbered and deliverable through the required account.

Price and return drivers

Matched shares = contracts × actual series multiplier. Residual shares = owned shares − matched short shares. Combined gross price change for a matched hedge equals shares × change in basis when cash and futures prices do not move together. Corporate-action adjustments can change the multiplier, so use the series record rather than the standard size by habit.

Worked case

Hypothetical holding 2,350 shares at TRY 100; standard future TRY 102, multiplier 100. Short 23 futures covers 2,300 shares, leaving 50 shares. Later cash and future are both TRY 90 at expiry. Cash loss = 2,350 × (90 − 100) = −TRY 23,500; short gain = 23 × 100 × (102 − 90) = TRY 27,600; combined +TRY 4,100. Hypothetical execution TRY 460, share custody TRY 40 and hedge funding TRY 600 leave TRY 3,000 before tax. The apparent gain includes the starting futures premium; inventory acquisition financing is excluded and must be added if shares were financed.

Adverse case

If cash reaches 90 but a pre-expiry future remains 95, short gain is only TRY 16,100 and the combined package loses TRY 7,400 before costs. A rights issue can require subscription cash while a futures adjustment preserves different contractual units. A stock halt can prevent selling the holding even when a futures quotation exists. Twenty-four shorts would instead leave 50 shares net short, adding upside risk.

Practical use

Check KAP corporate events, Borsa adjustment notices and share availability for delivery. The retrieved ordinary specification is 100 shares and physical settlement; it does not certify every adjusted series or member delivery service. Include two markets' spreads, commissions, funding and corporate-action cash, and identify whether dividends are gross or net under the investor's status.

Reconcile the confirmation, position register and cash statement separately. Costs include the quoted bid/ask spread, brokerage and clearing charges, collateral or principal financing, currency conversion, custody where relevant, and exit or termination charges. A mark is not a fill. Any amount explicitly excluded below remains outside the reported result. Tax is excluded from these teaching cases: an actual comparison requires income year, investor residence and individual/corporate status, contract and acquisition dates, settlement form and effective law. The GIB guide, checked 2026-10-26, covers 2025 individual investment income, so its publication date alone does not settle a 2026 derivative liability.

Decision boundaries

Use exact-unit hedges for identified holdings when basis and funding risks fit. Do not label an issuer hedge perfect merely because the names match. If the holding is pledged to a lender or cannot be transferred by delivery, close the future earlier or choose a paper alternative; delivery cannot be assumed from beneficial ownership alone.

Practice and references

Exercise: 1,080 shares, adjusted multiplier 120. Calculate the matched count and an eight-contract residual under a TRY 7 move. Solution: 1,080 / 120 = nine short contracts covering all 1,080 shares; eight leave 120 shares long. A TRY 7 increase produces TRY 840 residual gain for the eight-contract choice, while a TRY 7 fall loses TRY 840 before basis and costs. Using a standard multiplier of 100 would incorrectly suggest ten or eleven contracts.

Takeaway: Quantify the remaining position after a partial hedge using the actual cash schedule, with every excluded cost and remaining exposure stated.

Reference card: viop-future. Formula: Share hedge residual. Glossary: Encumbrance, Distribution adjustment. Next lesson: C3T4L3. Topic test.

Sources and verification date (2026-10-26):

Related product cards: viop-share-future.

Shared reference guide