Ways to use option to hedge investment

M

MoreYummy

Let's say I converted $100,000 CAD into USD, for investment, and want to buy back same amount of CAD in 2 or 3 years.
What is the most cost affective way to hedge this?
Buy "Call Option" that is at/near market price as of today with the same amount in notion value?

Thanks.
 
MoreYummy said:
Let's say I converted $100,000 CAD into USD, for investment, and want to buy back same amount of CAD in 2 or 3 years.
What is the most cost affective way to hedge this?
Buy "Call Option" that is at/near market price as of today with the same amount in notion value?

Thanks.
More...



Don't buy USD.



:)
 
MoreYummy said:
So you are expecting CAD to go down or flat after 2 or 3 years
More...


  1. No ...... I have no views on USD/CAD
  2. If I needed USD now I would buy USD at todays exchange rate.
  3. In 2 or 3 years buy back CAD at the going exchange rate.
  4. #2 and #3 is based on your OP.



:)
 
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