Hedging US shares with Interactive Brokers

[lmz4005]

Hi Guys,

I am in the process of trialling a momentum share trading system on the S&P500.

Base currency is AUD.

When I buy US shares, IB converts in USD with margin loan (I think).

How can I hedge the currency risk if I think the AUD is going up?

- IB does not allow Australians to use AUD.USD CFDs (would have been preferred choice)
- DX Futures is too much of position sizing
- ETF such as Betashares USD: but there is a 0.45%pa fee + brokerage?
- or Can I sell USD.AUD with a FX trade?

A bit confused at what is the best (meaning most economical) way of doing this hedging...

Any help would be greatly appreciated
Laurent

 

[lanzoluz]

INTERACTIVE BROKERS (TWS)

I have an IB account and subscribed to the ASX market data, but can't seem to get the pre-market data which is very important to me. any help pls?

 

[lmz4005]

I am unsure how relevant your comment is to the original post.
However, I have found IB customer service quite good in the past via ticket or phone:
Australia +61 (2) 8093 7300 Direct dial 10:00 - 19:00 (Mon - Fri) (Australia/Brisbane)
Good luck

 

[willy1111]

Hi Guys,

I am in the process of trialling a momentum share trading system on the S&P500.

Base currency is AUD.

When I buy US shares, IB converts in USD with margin loan (I think).

How can I hedge the currency risk if I think the AUD is going up?

- IB does not allow Australians to use AUD.USD CFDs (would have been preferred choice)
- DX Futures is too much of position sizing
- ETF such as Betashares USD: but there is a 0.45%pa fee + brokerage?
- or Can I sell USD.AUD with a FX trade?

A bit confused at what is the best (meaning most economical) way of doing this hedging...

Any help would be greatly appreciated
Laurent

I lookrd into some time ago.

Maybe do some research on mini futures contracts m6a, allows $10k parcels per contract. The traditional/normal futures is $100k.

So if US exposure is $230k, one might do 2 normal futures and 3 mini ones.

They expire every 3 months so it would have to be reviewed/rolled regularly.

 

[lmz4005]

You are legend!
I did not know I could use a mini futures contract....
I will check this out
Thanks

 

[Market Sniper]

Is there any more information on this as to the best way to hedge against rising Aussie dollar when trading US stocks? I have read using futures contracts as above or forex to offset. Can someone with experience pls comment on how to manage this? Thanks