Hedging US shares with Interactive Brokers

lmz4005 · 29 June 2017

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 · 29 June 2017

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 · 29 June 2017

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 · 29 June 2017

lmz4005 said:
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 · 29 June 2017

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

Market Sniper · 16 June 2023

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

Hedging US shares with Interactive Brokers

lmz4005

lanzoluz

lmz4005

willy1111

lmz4005

Market Sniper

Similar threads

Privacy & Transparency

Privacy & Transparency