Is there a simple way to hedge against USD collapse?

[bellenuit]

I have a portfolio of US shares through an online US broker that are worth about USD 250K. I am confident that the shares will go up in value, but fear there may be a drastic fall in the USD v. the Aussie.

Is there an easy way to hedge this portfolio against a USD fall?

 

[tayser]

short USD by:

buying AUD/USD, EUR/USD, GBP/USD, NZD/USD or XAU/USD or
selling USD/CHF, USD/JPY or USD/CAD

If you're long on AUD/USD you'll earn rollover (interest) every day, and if your punt is correct and USD collapses and AUD strengthens, you'll receive capital gains.

etc etc.

google:
- simple FX hedging.
- FX carry trade
- FX rollover

DYOR cos I'm not a licensed financial advisor.

Cheers.

 

[>Apocalypto<]

I have a portfolio of US shares through an online US broker that are worth about USD 250K. I am confident that the shares will go up in value, but fear there may be a drastic fall in the USD v. the Aussie.

Is there an easy way to hedge this portfolio against a USD fall?

tayser just beat me but i think the risk of doing that should be read three -100 times!

if you fear the USD falling to the aud buy the aud/usd to profit from the usd fall to the aud rising. you will also collect int from the positive carry.

but please beware I am not giving any advice here and if the aud falls to the usd with stocks falling you will lose on both ends!

aud/usd did drop on the last sell off with stocks while the usd increased in value.[/B]

Spot FX trading is leveraged!

you could look at USD futures options and maybe warrents????

 

[CFD]

So you could consider investing in something that usually goes up when the US$ falls, such as oil.

 

[CanOz]

OR, you could buy the SHORT ETF UDN which is an ETF that shorts the USDX.

I'm currently LONG this SHORT ETF and looking to add to it on the next leg down, if that so materializes. Anyway DYOR but its just an option.

Also, as a side note, if you want to take advantage of a commodity rally then Canadian ETFs are another good way to do this.

Cheers,


CanOz

 

[>Apocalypto<]

Can great post and idea.

If I could recommend anything to the thread starter to look at doing it's this.

Lower risk then taking spot FX no issues with expiry and roll value risk...

also it's and EFT so u may have the option to go in fully paid or on margin....

I can't recommend as I am not licensed, but If was in your position I would look into it.

great find Can well done!

cheers

 

[CanOz]

Can great post and idea.

If I could recommend anything to the thread starter to look at doing it's this.

Lower risk then taking spot FX no issues with expiry and roll value risk...

also it's and EFT so u may have the option to go in fully paid or on margin....

I can't recommend as I am not licensed, but If was in your position I would look into it.

great find Can well done!

cheers

Actually it was MRC that reminded me to hedge my commodity positions in US ETFs that got me looking at USDX ETFs. Otherwise i would end taking a beating on the rates once i cashed out again.

The beauty is that its much easier to figure out and tailor the position size to the exposure of your investments.

Its when you start doing these things that you realize how developed the US Markets are, they are very innovative....as we all know by now!

Cheers,


CanOz

 

[So_Cynical]

On the subject of commodity ETF's, if the Management fee is 0.49% p.a.
payed daily...is that like 0.49% divided by 365?

 

[lasty]

On a hedge basis I would look at FX options.