flyscots Posted July 13, 2004 Share Posted July 13, 2004 Has anyone ever traded in currency? Does anyone know anything about it? The reason I ask is because the US Dollar has been really low against the GB Pound for a few months now. Surely this can't last much longer, so you'd expect the value of the Dollar to rise again. Therefore, do you think buying US Dollars now would be a good idea as their value will increase? Of course it's risky, but not as risky as buying shares. For those who don't know, I've had two six month stints in the US over the last couple of years and I plan to go back as soon as I can. If I buy dollars now do you think I'll be saving money? At the moment, £1 = $1.85. Over the last couple of years, £1 would usually get you around $1.50. So, make that £1000 and you're looking at a $350 profit, assuming of course the dollar strengthens again. What do you think, should I go for it or just wait until I've bought the plane ticket? Link to comment Share on other sites More sharing options...
Sylver Posted July 13, 2004 Share Posted July 13, 2004 [satire]Just like you friggin Europeans to take advantage of our financial woes. Go on. Buy up all the US dollars you can then come back here and live like the Prince of Persia. See if we care. We have guns and god on our side. And Britney and hundreds of thousands of girls who look almost exactly like her. Muhahahahaha, you can stop us! We will eat your culture! WE WILL EAT ALL CULTURES![/satire] I really don't know what to put here. Link to comment Share on other sites More sharing options...
flyscots Posted July 13, 2004 Author Share Posted July 13, 2004 Originally posted by Sylver: [satire]Just like you friggin Europeans to take advantage of our financial woes. Well, some would say it's showing initiative. Some wouldn't be able to spell inishatiff. And Britney and hundreds of thousands of girls who look almost exactly like her. [/satire]Yes there are a few reasons I'd like to come back! Hi Sylver Oh, I have to ask you something, I'll e-mail you in a minute. By the way folks, (not you Jack) I'm just looking for some opinions and a bit of advice. Please don't get all political on me! Thanks. John Scotsman Link to comment Share on other sites More sharing options...
ani Posted July 13, 2004 Share Posted July 13, 2004 John, Personally, I believe that America has been living on reputation, power, and PAPER MONEY for quite some time now. I do not see the American dollar strengthening, but rather collapsing when someone honest, whether it be by election or seizure, finally obtains access to all of the securities owned by the US Government. Okay John, I edited all the other stuff out, but I'm not going to put it in the Political forum... I try to avoid that place as much as possible However, Bush was asked one time in an interview what would happen if the money runs out... his reply was, "We'll just print more" Link to comment Share on other sites More sharing options...
Botch. Posted July 13, 2004 Share Posted July 13, 2004 I know two people who retired just by buying the right currency at the right time. I'm only saying that it CAN be done, whether it'd work in your specific instance, I have no idea... Good Luck! Botch "Eccentric language often is symptomatic of peculiar thinking" - George Will www.puddlestone.net Link to comment Share on other sites More sharing options...
flyscots Posted July 14, 2004 Author Share Posted July 14, 2004 Botch - thanks very much. I don't have enough money to make a fortune doing this, just a little bonus, I hope! Infact, I don't plan on selling the dollars back, as traders usually do. It's my intention to keep them to spend when I get back to the States. Ani - thanks for this quote: I do not see the American dollar strengthening, but rather collapsing when someone honest, whether it be by election or seizure, finally obtains access to all of the securities owned by the US Government. But as for the rest of your post: From my second post in this thread I'm just looking for some opinions and a bit of advice. Please don't get all political on me! Wrong forum. The points you bring up would make for a good thread in the politcal forum, so why not go ahead and post them in there, not here please. Thanks again. Link to comment Share on other sites More sharing options...
michael saulnier Posted July 14, 2004 Share Posted July 14, 2004 At an earlier time in my life I was a commodities broker, including currencies. There is a well established marketplace for buying and selling currencies, and several methods of doing so... First, you can do what you're suggesting. Convert your currency to US dollars on a "one to one" basis. This has the advantage of no risk beyond a negative directional change in the currency exchange rates and the transaction costs from the bank or financial firm to swap pounds for dollars. If you take a "buy and hold" approach, you can hold the dollars until you need to use them in the US or the exhange rates change enought to capture some profits. If you have more of an interest in maximizing the profit from directional changes in rates, there are a couple of other methods... Options and Futures. Both of these financial products allow you to greatly leverage the amount of gain (or loss) that occurs based on the changes to the exchange rates. For example, let's say you had a thousand pounds available to invest in this... (Currently worth about $1,850 US)... If you just bought straight dollars, you would "control" the $1,850 for the small amount of transaction cost. If the dollar strengthens, you get the gain on a 1:1 basis. If it loses value you lose on a 1:1 basis. It's obvious that the dollar won't go to zero, (in fact there's probably a "trading range" that it will cycle within, see if you can find a chart that shows the value over the last 1 to 3 years). With Options, you can control 10 to 50 times as much currency with the same amount of investment. The risk is limited to the amount you've invested, and the upside is magnified by the "leverage"... Meaning, that if the underlying currency exchange changes say 10% in your direction, your profit will be magnified by the multiplier of how much more currency you control. This means you could double your money on a 10% move... if you time it right. Futures contracts have more risk, and even more rewards... I don't think you're ready for a full-blown futures contract play... it's probably a bit bigger than you want, and much more risk. If you are attracted to the idea of the additional leverage in options, find a broker/dealer who specializes in them. WHICH option to buy is as important as which direction the market will go. I don't have the time here to fully discuss this investment strategy, but I can say there is a lot of money if you're on the right side in the right time frame. But as far as your original plan of just buying some dollars... if you think the dollar is likely to get stronger... it's not a bad idea. If you end up with 20 or 30% more buying power... great... if you're wrong... it probably won't be by so much that you're really in trouble. Good luck! guitplayer I'm still "guitplayer"! Check out my music if you like... http://www.michaelsaulnier.com Link to comment Share on other sites More sharing options...
flyscots Posted July 14, 2004 Author Share Posted July 14, 2004 That's brilliant guitplayer, thankyou so much. I'll look into Options, it sounds intriguing. The thing is, for everyone who's profited trading currency, there's bound to be people losing money too. Like you said though, I don't really have anything to lose by buying now. I'll never have a negative, even if the dollar continues to fall in value, I'm still getting significantly more now than I did on my previous trips to the US. Thanks for the advice, it gives me some much needed encouragement! John Link to comment Share on other sites More sharing options...
whitefang Posted July 14, 2004 Share Posted July 14, 2004 All I'm familiar with is the Canadian exchange. Occasionally, my wife and I will go to the casino in Windsor, Ont. The pre-Bush exchange rate was $1.53. Now, it's down to $1.29. And dropping! And I don't think it's because their dollar's getting stronger. Many cashiers tell me I'm right. Whitefang I started out with NOTHING...and I still have most of it left! Link to comment Share on other sites More sharing options...
Philter Posted July 14, 2004 Share Posted July 14, 2004 I would be really careful with the dollar right now. Honestly, as an American with all my assets in dollars, I'm looking for ways out. The fed has been printing money like crazy and we are completely overextended. What you should do is start bringing those mighty pounds here and start snatching up some cheap gear. ---------------------------- Phil Mann http://www.wideblacksky.com Link to comment Share on other sites More sharing options...
flyscots Posted July 17, 2004 Author Share Posted July 17, 2004 Thanks guys! It's still going up, or down, depending which way you look at it. Today, £1 = $1.87 Link to comment Share on other sites More sharing options...
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