How to hedge the pound dollar

[dietcoke999]

 

Looking for some advice. I have money in an american trading account and i want to ensure that these dollars maintain the same pound value over time. i know i need to hedge the pound/dollar somehow. i took a long position in IG for pound/dollar but then realized the costs of keeping this open long term would cost a fortune in overnight fees. IG states to 'To avoid paying overnight funding you might want to open a trade on a future or a forward contract'. I have no idea what this means. Can Anyone  advise how i can achieve keeping my dollars the same in pounds.

[Caseynotes]

20 minutes ago, dietcoke999 said:

 

Looking for some advice. I have money in an american trading account and i want to ensure that these dollars maintain the same pound value over time. i know i need to hedge the pound/dollar somehow. i took a long position in IG for pound/dollar but then realized the costs of keeping this open long term would cost a fortune in overnight fees. IG states to 'To avoid paying overnight funding you might want to open a trade on a future or a forward contract'. I have no idea what this means. Can Anyone  advise how i can achieve keeping my dollars the same in pounds.

HI, you can bring up the forward chart for gbpusd by clicking on the small arrow next to the chart title (see pic) and selecting 'Forward' (aka Futures). They are designed for holding open for the longer term, the spread is larger than for the daily funded bet (DFB, aka Spot or Cash) but there are no overnight funding charges, note the spread is repaid at each 'roll over' at the end of the term (check settings in your my IG page for auto roll over).

[dietcoke999]

22 minutes ago, Caseynotes said:

HI, you can bring up the forward chart for gbpusd by clicking on the small arrow next to the chart title (see pic) and selecting 'Forward' (aka Futures). They are designed for holding open for the longer term, the spread is larger than for the daily funded bet (DFB, aka Spot or Cash) but there are no overnight funding charges, note the spread is repaid at each 'roll over' at the end of the term (check settings in your my IG page for auto roll over).

 

Great thanks. But I can't seem to find the 'Forward' option:

[Caseynotes]

16 minutes ago, dietcoke999 said:

Great thanks. But I can't seem to find the 'Forward' option:

not sure, I see my cfd demo doesn't list them but I don't have a cfd live account to check, also not sure if country you are in makes a difference.

https://www.ig.com/uk/glossary-trading-terms/forward-contract-definition

[Guest Mark27000]

My Australian CFD account doesn't have that option but my UK spreadbetting does so It probably a CFD thing

[Caseynotes]

28 minutes ago, Mark27000 said:

My Australian CFD account doesn't have that option but my UK spreadbetting does so It probably a CFD thing

I have a feeling Oz only do indices and commod futures/forwards and not fx but may be wrong.

Edited October 11, 2019 by Caseynotes

[Guest Mark27000]

49 minutes ago, Caseynotes said:

I have a feeling Oz only do indices and commod futures/forwards and not fx but may be wrong.

Just checked UK CFD and that doesn't either

[Caseynotes]

16 hours ago, Mark27000 said:

Just checked UK CFD and that doesn't either

ok, so there are only FX Forwards on the SB platform (UK only) and not on the UK CFD platform which only has Forwards and Futures for indices and Commods, same as in Australia.

[Guest Mark27000]

6 hours ago, Caseynotes said:

ok, so there are only FX Forwards on the SB platform (UK only) and not on the UK CFD platform which only has Forwards and Futures for indices and Commods, same as in Australia.

Yep