hedging the value of the portfolio (in dollars) for European subscribers of LI

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  • #79495
    Korving99
    Participant

    By using the LI portfolio’s we invest in US companies and ETF’s. In other words in dollars.

    I am very interested how European subscribers (and partners) of LI hedge their portfolio against the dollar and when?

    #79496

    – You can hedge by selling Forex USD versus Euros (EURUSD).
    – You can also use the Futures on these ETFs which eliminates the currency risk. There are synthetic Futures for nearly every ETF.
    – You can use real Futures like ES, GC, UB ….. instead of ETFs.
    – You can sell options with a long expiry. For example a Jan 2021 put option on TLT. The higher the delta the closer the put option behaves like the underlying. Option selling however is nothing for beginners. I would sell equity options only with a high (0.7) delta and minimum 100 days expiry.

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