Monday, August 08, 2011

AUD/HKD FX contract

On Friday I entered into a short term (two week) AUD/HKD FX contract:

Spot rate at time of contract: 8.096
Strike: 8.05
Annualised premium: 10.06%
Fixing date: 18 August
Maturity Date: 19 August
Implied break even rate: 8.019

This is largely an exercise in attempting to extract a better yield from my bank deposits. While this is not always a sensible exercise, with inflation running at 4+% and deposits yielding close to zero, the alternative is to accept certain erosion of the real value of my savings. The amount involved is not particularly large - about the "standard" amount I would put into a single stock position.


Anonymous said...

Why don't you just go for a time deposit at one of the smaller banks?

traineeinvestor said...


Good question. Last time I checked, I couldn't get anywhere near the same yield without locking myself up for a lengthy period of time.