Locking in CDN dollar

[daboy]

Plan--to purchase a Vacation propertyin USA or Vergin Islands in 2 to 3 yrs
1) will be paying in USD
2) Afraid that in 2 to 3 yrs the CDN will not be this high vrs USD
3) how do I buy a "call" on the USD dollar 2 to 3 yrs out. Not keen on a futures contract as I have to take delivery. I would like to lock some of the appreciation in now .
Any suggestions
Thanks

Daboy

 

[FOOTSNIFFER]

I admit that I don't know much about currencies, but when I want to lock in the value of a position using options, I do what's called a 'collar'.
With a collar, you sell an option to someone else who'lll enjoy any more upside in the dollar, and take the premium you receive from the sale of the call and purchase a put with it. Otherwise, a purchase of a long term option as you suggest will involve some heavy premium cost......but you're thinking is sound about the likely direction of the can$; ie: downwards.

 

[fuji]

Why not take all your savings that you plan to use for the purchase and convert them to USD today? You could invest them in US bonds or the US stock market or something.

If you have another asset the sale of which is pending, you might be able to work out some kind of forward currency deal with your banker. Ordinarily this is only done for businesses but for a house-sized transaction where the assets are all plainly there, they may deal.