How do I short USD index?

[damien275x]

How do I 'short' the USD? I don't want to know the risks, I'm willing to risk 100% of whaever I stick into the market. I have done analysis and conclude it may drop in the next short term, can I do a 4 month bet? How do I do it through commsec?

Sorry for sounding like a newb. Can't find out how to do it simply. Do I need an international account or what? Whats the easiest way to short a currency index or a stock.

 

[skc]

Re: Question- How do I Short USD index

How do I 'short' the USD? I don't want to know the risks, I'm willing to risk 100% of whaever I stick into the market. I have done analysis and conclude it may drop in the next short term, can I do a 4 month bet? How do I do it through commsec?

Sorry for sounding like a newb. Can't find out how to do it simply. Do I need an international account or what? Whats the easiest way to short a currency index or a stock.

When you short something you can lose more than what you stick in the market...

 

[TulipFX]

How do I 'short' the USD? I don't want to know the risks, I'm willing to risk 100% of whaever I stick into the market. I have done analysis and conclude it may drop in the next short term, can I do a 4 month bet? How do I do it through commsec?

Sorry for sounding like a newb. Can't find out how to do it simply. Do I need an international account or what? Whats the easiest way to short a currency index or a stock.

Given you want to risk 100%, I guess you want to also use some degree of margin.

Not many forex brokers I know trade it, one I do know is avaFX. You can see more information here: http://www.avafx.com/Graphics/Images/stocks.pdf . You can see the USD index listed there.

 

[TulipFX]

Re: Question- How do I Short USD index

When you short something you can lose more than what you stick in the market...

When you trade forex you are trading ratios, not absolute values like stocks.

 

[Reasons]

How do I 'short' the USD? I don't want to know the risks, I'm willing to risk 100% of whaever I stick into the market. I have done analysis and conclude it may drop in the next short term, can I do a 4 month bet? How do I do it through commsec?

Sorry for sounding like a newb. Can't find out how to do it simply. Do I need an international account or what? Whats the easiest way to short a currency index or a stock.

Not sure if this is trick question, but you just go short the AUD/USD currency pair in Forex. Any CFD platform will let you do it.

The only way you might be able to do it via Comsec is through a US account and using an ETF if they have one that does it - the US has thousands of these ETFs for different things - certainly have them for shorting their indicies. The brokerage is about $60-80 through Comsec from memeory.

You can certainly stay in for 4 months. As you don't want to know about risks I will provide you with none, but there are a lot more than the others have indicated above if you use CFDs, so do your research.

Cheers

 

[syswong]

you going to play with something that is so high in risk and you don't care about the risk?? Good luck mate. All the investment class (good or bad) will always start one thing.... manage your risk. I do not suggest you do anything before you understand that concept.

 

[sinner]

Wow this thread is insanity. Hope a mod comes in here soon!

He wants to short the USDX and you tell him to short AUDUSD?

You can either build a synthetic spot FX USDX short position by long/short the respective components of the index in their correct ratios, buy a put on DX futures (ICE?), or short the futures directly.

If you don't know what you are doing (and it sounds like you don't) I think it would be extremely unwise to proceed with your proposed course of action.

 

[Reasons]

Wow this thread is insanity. Hope a mod comes in here soon!

He wants to short the USDX and you tell him to short AUDUSD?

You can either build a synthetic spot FX USDX short position by long/short the respective components of the index in their correct ratios, buy a put on DX futures (ICE?), or short the futures directly.

If you don't know what you are doing (and it sounds like you don't) I think it would be extremely unwise to proceed with your proposed course of action.

Yep - did not read the question correctly.

 

[Reasons]

However...

On the NYSE there are 2 listed entities that closely follow the USDX so you do not have to build any weird synthetic;

UDN - bearish (inverse to the actual USDX movement, so you are long, but it goes up as the USDX goes down) and UUP - bullish.

Info here - http://dbfunds.db.com/usdollar/index.aspx

I have just had a look at the 2 in relation to the real USDX and they behave very well in comparison.

So theoretically you should be able to trade them easily with standard risks and do what you want if you have a US Comsec account with NYSE listings.

Cheers

 

[sinner]

However...

On the NYSE there are 2 listed entities that closely follow the USDX so you do not have to build any weird synthetic;

UDN - bearish (inverse to the actual USDX movement, so you are long, but it goes up as the USDX goes down) and UUP - bullish.

Info here - http://dbfunds.db.com/usdollar/index.aspx

I have just had a look at the 2 in relation to the real USDX and they behave very well in comparison.

So theoretically you should be able to trade them easily with standard risks and do what you want if you have a US Comsec account with NYSE listings.

Cheers

LOL!

I am highly amused that the concept of holding a weighted basket of spot contracts as a synthetic equivalent to USDX short is "weird" considering that's exactly what the DX is, but holding derivative of derivative ETFs with associated negative delta is totally fine...


I wonder how recent new holders of UUP are feeling about that almost 1% performance gap versus their counterparts who bought the Jun DX future... I am sure UDN is really a great product too.



There is often a negative delta between these ETFs and their respective futures or cash contracts! If you want the exposure, trade the actual market: short the future, buy a put on the future or hold the basket of weighted spot contracts.

 

[Reasons]

LOL!
I am highly amused that the concept of holding a weighted basket of spot contracts as a synthetic equivalent to USDX short is "weird" considering that's exactly what the DX is, but holding derivative of derivative ETFs with associated negative delta is totally fine...If you want the exposure, trade the actual market: short the future, buy a put on the future or hold the basket of weighted spot contracts.

Hi sinner

I understand the deltas that arise with most ETF's, and you propose some valid points, but damien275x specifically asked asked how he could trade the USDX, and via Comsec if he could. You identified that he probably did not want to build a synthetic equivalent, and possibly shouldn't.

No-one else offered him a solution to his problem, so I did, and within his requested parameters.

My moto in trading is if you can find a simple way of doing something, then do it. I leave clever and complex to those with more time or who are brighter than me. If it is not his area of expertise or interest, the USDX will have crashed, or he might have died of boredom or otherwise before he even gets his synthetic DIY product built, and any negative delta will then pale into insignificance.

ETFs as you know are consumer products to make it easy to do something like this, and like most takeaways, you have to pay a premium for that ease.

In this case there is no easy or direct alternative.

Using the suggested method in conjunction with his Comsec platform means he can quickly setup, enter and exit a trade and make good money if that trade goes according to plan.

Cheers