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Hedging against devaluation of your account currency
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Hedging against devaluation of your account currency

  #1 (permalink)
Trading Apprentice
Warsaw Poland
 
Futures Experience: Intermediate
Platform: Sierra Chart
Favorite Futures: FX
 
Posts: 1 since Oct 2016
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Hedging against devaluation of your account currency

Dear fellow Traders,

for those of you who can not open a futures account in their home currency - how do you hedge against devaluation of your deposit currency?

Best,
Toya

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  #2 (permalink)
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  #3 (permalink)
Market Wizard
Germany
 
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Most brokers show your net currency exposure in your account and/or in your daily reports.

Since debasing periods are not really funny I normally hedge my net exposure in the EURUSD during these periods.
During revaluation periods (like e.g. 2017 YTD), I loosen or liquidate the hedge.

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  #4 (permalink)
Market Wizard
Houston, TX
 
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My only experience of something like this is trading non-USD margin furtues in a USD denominated account.
In my experience it is true what @choke35 says that
choke35 View Post
Most brokers show your net currency exposure in your account and/or in your daily reports.

But when you say
choke35 View Post
Since debasing periods are not really funny I normally hedge my net exposure in the EURUSD during these periods.
During revaluation periods (like e.g. 2017 YTD), I loosen or liquidate the hedge.

what do you actually mean.
Some brokers seem very aggressive in charging you (screwing you) interest/borrow costs in the non-denominated currency. Others don't.
Depending how your broker handles it you should only need to a) hedge your profits/losses or b) your margin requirements. You don't need to hedge the notional value of the contracts you are trading.

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  #5 (permalink)
Market Wizard
Germany
 
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Hedging the net currency exposure is comparable to hedging only the margin in some sense.
Both of us don't hedge gross positions (notional value, gross exposure), but only fractions of it.

Regarding the interest you are absolutely right; hedging comes at a price.

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