With the current forex volatility, especially in pairs like $USDJPY, what are some effective hedging strategies being employed by others? Interested in both spot and options perspectives.
Consider looking into currency baskets if you're holding multiple pairs. A diversified basket can naturally reduce some pair-specific volatility without needing complex option strategies for each.
For spot, just reducing exposure during high volatility periods seems like the most straightforward 'hedge' for me. Options can get pricey with implied vol spiking. Are you finding the premium worth it?
I've been using a dynamic hedging approach with short-term options, specifically buying puts on my long USDJPY positions. It's been more cost-effective than just spot adjustments given the rapid swings.