How to neutralize the risk on thai baht?

Discussion in 'Risk Management' started by mbyt, Jan 6, 2020.

  1. mbyt


    Hi everyone,
    I'll do my best to be clear even though english isn't my first language.
    5 years ago I bought a property in Thailand, right now I have a good profit mostly due to the currency appreciation against the euro. I'd like to neutralize the currency risk because I think the baht could decline in the near future. I thought the best way to achieve that was by going long on eur/thb, but that isn't possible because the brokers don't offer that cross.
    The only way I know to edge the risk is by building a synthetic eur/thb by going long on eur/usd and simultaneosly long on usd/thb. Problem: it's very costly due to the high swap rates.

    Do you know which broker has the lowest swap costs on usd/thb? Do you know a better way to hedge the currency risk, perhaps by using an etf?

    Thanks a lot!
  2. jys78


    Ask Niederhoffer.
  3. carrer


    Thai Baht will appreciate. Keep buying it.
    1 Baht = 1 USD. Just wait.

    Thank me 10-15 years later.
  4. SunTrader


    Try Saxo.
  5. Sig


    If you go short a European Thai ETF that is quoted in EUR and silmutaneously buy a Thai fund tracking the same index in Thailand you'll get a near perfect currency hedge. Could be expensive though if you can't cross margin the two positions, although you could use options to help with that. You can do the same, although imperfectly, with any traded asset quoted in EUR in Europe where you can buy roughly the same asset in baht. Sorry but I'm not familiar enough with European ETFs and trading to offer a specific example, we're not able to trade much of it from the US.