If I’m a Canadian buying a US stock with an undefinite holding horizon, is there a way of hedging my currency risk?
Maybe short the dollar?
similarly, borrow dollars
is there an ETF out there that would allow me to short it?
projectplatnyc Wrote: ------------------------------------------------------- > Maybe short the dollar? Kind of expensive for an indefinite period. Basically, your purchase is a bet on the C$ falling in value relative to the USD. To hedge your best bet would be to buy a stock that will benefit from the canadian dollar getting stronger. Look for an American company that gets a large portion of its revenue from Canada.
dlpicket Wrote: ------------------------------------------------------- > projectplatnyc Wrote: > -------------------------------------------------- > ----- > > Maybe short the dollar? > > Kind of expensive for an indefinite period. > Basically, your purchase is a bet on the C$ > falling in value relative to the USD. To hedge > your best bet would be to buy a stock that will > benefit from the canadian dollar getting stronger. > Look for an American company that gets a large > portion of its revenue from Canada. can you say - basis risk?
^ more like “model risk” for that one.
Sims Wrote: ------------------------------------------------------- > is there an ETF out there that would allow me to > short it? you can use UDN
Buy a US maple syrop and poutine manufacturer…
volkovv Wrote: ------------------------------------------------------- > Sims Wrote: > -------------------------------------------------- > ----- > > is there an ETF out there that would allow me > to > > short it? > > you can use UDN Only problem with that fund is that its marklet cap is 65M, its gonna die way before im out of my position
I’d think it’s also a problem that it’s mostly composed of EUR-USD…
joevc03 Wrote: ------------------------------------------------------- > dlpicket Wrote: > -------------------------------------------------- > ----- > > projectplatnyc Wrote: > > > -------------------------------------------------- > > > ----- > > > Maybe short the dollar? > > > > Kind of expensive for an indefinite period. > > Basically, your purchase is a bet on the C$ > > falling in value relative to the USD. To hedge > > your best bet would be to buy a stock that will > > benefit from the canadian dollar getting > stronger. > > Look for an American company that gets a large > > portion of its revenue from Canada. > > > can you say - basis risk? What’s the point in hedging without SOME basis risk. Completely devoid of it, your long and short offset each other. Might as well go with the crush natties and recycle ETF… symbol is DAJ I think.