I am looking to hold a position on the HKD long term (several months, maybe over a year). Is there an exchange that trades with some volume or is there a FX broker that has tight spreads (a few ticks wide) on the HKD forward/future?
ICE offers them and so any futures broker with access to Singapore should trade them. No idea on volume. How do you plan on mitigating roll risk?
Since the HKD is pegged to the USD and has been for over 35 years, looks like someone wants to bet that the HKD is going to be devalued relative to the USD as Hong Kong has exhausted over roughly 80% of its reserves to maintain that peg. This is the thesis of Kyle Bass, hedge fund manager. He's been banging the table over at Real Finance Vision (also a YouTube channel w/vids of his interviews) that devaluation of the HKD is eminent (relative to a 35+ year peg).
Kyle is wrong it's not true that HKMA exhausted 80% of its dollar reserves. That is why nothing so far happened. HKMA in fact managed the peg through much more volatile times and succeeded (Sars, Asian financial crisis,...)
Thank you for everyone's input. ICE has no volume. IG and Saxo offer forwards/futures but the spread is very wide. If there are any alternatives please let me know.
@blueharecap suggested an interesting idea, "Synthetic long 0005.hk and short HSBC.US", I have not had time yet to test this thesis and calculate historic spreads on this but it might work. I just don't believe the peg will break but for anyone who does it might be worthwhile digging a little deeper into his idea.