http://www.abnamromarkets.ch/DE/Showpage.aspx?pageID=5
Surely, there are other issuers, too. For example Goldman Sachs?
For example: ABN Amro are trading CHF/USD (CH0044400940) and CHF/EUR (CH0048323395) mini futures on the swx in Zurich.
Interesting, thanks. So here the counterparty risk is ABN Amro who is the issuer of the certificates.
I have not really studied this product. You could ask the issuer and the stock exchange for a risk assessment.
Ther are a cuple of ETFs (UUP and UDN) that track USD strength / weakness.
Then you could always ask some bank to hedge your currency risk in the forwards market (i.e. for deferred / future settlement) - but this also implies that you'd lose any potential gains.
Some sites like intrade.com let you "bet" on a currency's moves - whatever gains you'd make would offset the eventual losses on the other side.
You might want to consider FX option strategies - but the volatilities suggest that you should rather "sell short" rather than purchase FX options - something that could backfire expensively if you don't have enough specific experience.
But at the end of the day I can only say the FX market has become so volatile it leaves even the most grizzled pros speechless. The reasons for this erratic behaviour are manyfold and can only be summarized as being the effect of credit crunch + bank losses + deleveraging, all of which has contributed to drastically reduce the FX market's overall volumes, thereby increasing the price discontinuities.
The trend might change against the USD, as "helicopter dollars" start to be priced for what they really are worth, i.e. not much :-/
Which brings us to the fact that owning gold wouldn't be a bad idea, after all.
But even in this case - price spreads for gold coins have skyrocketed, as this strategy/idea is now some months old and there is physical shortage of the stuff....
There never is "one" easy solution, eh? :-/
Paul
Nope, funds like that are not my area of expertise. I trade outright and on a proprietary basis in index options, index futures, single stock options, warrants and various other instruments.
It is interesting and indeed a very real concern. Instruments traded on eurex are settled on exchange and basically do not have counterparty risk. Warrants on SWX for example are not insured at all with regards to counterparty risk. Indeed one of the things I have been doing lately is reducing such exposures. Personally, I think it is rubbish (and shocking) that SWX do not act as guarantor via a clearing institution.
Weeelll .... SWX's role isn't the same as being a clearinghouse (i.e. X-clear).
And even the Clearinghouse is funded by someone - typically most of them big & dangerously undercapitalized banks
The market CAN go broke, eventually
Ciao
Paul
to OP- Generally for a variable/uncertain cash flow, the effecient way to hedge is through options.
Unc Groove is correct about the hidden risks in the clearinghouse's pool that not many people actualy realise. but comparatively, its still the safest instrument available.