Hello, I hope I can get some advice for my situation. I invest in USA stocks with trading 212 ISA account, GBP currency. I researched the topic and the easiest way I found to hedge against the GBP appreciation was through wisdomtree ETF LONG GBP SHORT USD that my broker allows.
So far The pound has depreciated around 17% against the dollar and I want to protect my future investment in case of a reversal.
However, I cannot calculate how much I need to invest in the etf to mask the currency fluctuations from my investment.
Example: £1000 in stock A, assuming the stock remains at the same price for 1 year but the pound increases 5% against the USD. After 1 year, my investment would be £950.
How to protect against that using wisdom ETF without having to put £1000 into it? as I want to put my capital in stocks instead. Can I use the 3x or the 5x one? but those ones are supposedly losing money over time.
Other options are CFDs but I don't understand them and I guess they come with a lot of interest since I will keep the position open for a year. Thank you, any help would be appreciated or a link to a simple explanation.
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