Your favored currency ETF for protection vs dollar decline

Option Trader · Mar 30, 2008

Hello my fellow ET members,

What currency ETF would you recoomend most for protection versus dollar decline (& profitability).

Why?

risktaker · Mar 30, 2008

Currency ETF's are the *dumbest* etf's ever thought of. Clearly designed for dumb newbies/bag holders which is why they have no volume. Why not just trade whatever currency pair you want through a broker like IB and put the rest of your money to work in something else?

Option Trader · Mar 30, 2008

Quote from risktaker:

Currency ETF's are the *dumbest* etf's ever thought of. Clearly designed for dumb newbies/bag holders which is why they have no volume. Why not just trade whatever currency pair you want through a broker like IB and put the rest of your money to work in something else?

Here's the list I found of ETF's:
http://etf.stock-encyclopedia.com/category/currency-etfs.html

What currency pairs would you recommend instead?

risktaker · Mar 30, 2008

I'm not recommending any currency. All I saying was that currency *etf's* are a BAD way to trade currencies. Why? Because currencies by their very nature move very little % wise over time. You need *some* leverage, certainly NOT 50-100x like the bucket shops but some leverage like 5-10x in order to come up with a meaningful trade. Unless you think the dollar will be worth 50% next year.

Quote from Option Trader:

Here's the list I found of ETF's:
http://etf.stock-encyclopedia.com/category/currency-etfs.html

What currency pairs would you recommend instead?

Daal · Mar 30, 2008

currency etfs are bad but it might make sense to use their options

Option Trader · Mar 30, 2008

Thank you both for your input about currency ETF's & options.

Klamath · Mar 30, 2008

So a currency ETF just buys a foreign currency and piles it over in the corner or something? Why don't they at least put it in a money market equivilant of that currency?

AAAintheBeltway · Mar 30, 2008

They are useful for IRAs or 401k plans where you are restricted to funds. I believe Rydex has a weak dollar mutual fund that offers two times leverage. Basically, they are a short term debt type alternative.

ultimaonliner · Mar 31, 2008

Quote from Option Trader:

Thank you both for your input about currency ETF's & options.

OT, you're all class

barnetda · Mar 31, 2008

Quote from Option Trader:

Here's the list I found of ETF's:
http://etf.stock-encyclopedia.com/category/currency-etfs.html

What currency pairs would you recommend instead?

Thats a great web site, Ive been looking for something like that.

thanks