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Strategies & Market Trends : Classic TA Workplace
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To: Patrick Slevin who wrote (140684)1/28/2007 10:00:22 AM
From: Moominoid  Read Replies (1) of 209892
 
I have accounts in Australia and in the US (latter including IB). The currency ETFs aren't attractive as they don't allow you to do anything with that foreign currency - you have to hold it as cash. I've been experimenting with forex futures as a way of hedging my exposure... but am thinking options on futures might be a better way to go. So at the moment I am just experimenting still. But you can put down roughly $1000 in margin and buy an AUD future and be exposed to AUD 100k. That then would hedge away USD 78k of US dollar exposure. But all the while the USD 78k can be invested in anything you like. If I short an AUD future then I convert AUD 100k exposure into a USD exposure but my money stays in Australia invested in Aussie mutual funds and stocks etc. Of course if you get the direction of the market wrong you rapidly have to supply a lot more margin :) If you use options that's not the case of course.

Up till now I just have gradually shifted money between the two countries. From 2002 when I moved back to the US from Australia I often sent money to Aus when the Aussie looked cheap or keep money in the US when the Aussie looked expensive. I am planning to begin transferring money from dividends and distributions in Aus back to the US. I'm not interested in speculating in currencies just trying to hedge my exposure against adverse movements when they seem likely to me based on either fundamentals or technicals.
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