Forex hedging

[Hyperion]

This question does not relate to short term forex trading for profit.

Rather I was wondering if anyone had some suggestions on a broker/bank/firm which would be able to provide forex hedging.

E.g. if I knew that I needed to go overseas to the US in 1 years time, and that I would need to transfer maybe 10,000AUD into USD at that time. However, I am worried that the USD/AUD rate might be lower at that time, so I want to lock in a rate now.

Could you talk to a commercial bank about taking out a forwards contract?

Would holding a long term CFD position using a CFD broker (igmarkets or whatever) work?

Any other better solutions?


Thanks for your help

 

[Stormin_Norman]

buying a 0.1 lot contract at any broker would work.

any gain/loss made on that contract would effectively hedge the resulting transfer come the end of the year.

you should be able to cover your position for about $1,000.

 

[Hyperion]

Are you talking about a CFD?

Which broker do you suggest?

So just to clarify, I take out the CFD contract now, and close it out in 1 years time. The profit/loss I make on the CFD should offset the loss/profit from the actual currency transfer.

Will the CFD pricing will take into account the differential in interest rates??

 

[lasty]

This question does not relate to short term forex trading for profit.

Rather I was wondering if anyone had some suggestions on a broker/bank/firm which would be able to provide forex hedging.

E.g. if I knew that I needed to go overseas to the US in 1 years time, and that I would need to transfer maybe 10,000AUD into USD at that time. However, I am worried that the USD/AUD rate might be lower at that time, so I want to lock in a rate now.

Could you talk to a commercial bank about taking out a forwards contract?

Would holding a long term CFD position using a CFD broker (igmarkets or whatever) work?

Any other better solutions?


Thanks for your help

There are several ways you can hedge forward.
One is outright fwd for the 1 year expiry.
The other is an FX option
I suggest you call a commercial bank.

I wouldnt be using margin FX to trade 1 year forward position.
Can get too dangerous.

 

[Timmy]

Try ozforex too.

http://www.ozforex.com.au/