Greetings,

Could anyone explain how the market price for the exotic cross pairs, such as the GBPCHF, is calculated....?

Thanks

Could anyone explain how the market price for the exotic cross pairs, such as the GBPCHF, is calculated....?

Thanks

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- | Joined Mar 2007 | Status: Member | 14 Posts

Greetings,

Could anyone explain how the market price for the exotic cross pairs, such as the GBPCHF, is calculated....?

Thanks

Could anyone explain how the market price for the exotic cross pairs, such as the GBPCHF, is calculated....?

Thanks

- Joined Mar 2006 | Status: THANK YOU MERLIN,TWEE and FF Team | 4,603 Posts

Disliked

Could anyone explain how the market price for the exotic cross pairs, such as the GBPCHF, is calculated....?

ThanksIgnored

This is how it is done:

A pip is calculated by dividing the smallest increment for a given currency by the current exchange rate.

Using the GBPJPY as an example you would get: 0.01/233.18 = 0.0000428

This is expressed in terms of the base currency which in this case is the GBP. To convert to US Dollars you must multiply by the GBPUSD exchange rate which is currently 1.9592.

0.0000428 x 1.9592 = 0.0000838

To convert this to a standard lot you multiply by $100,000

0.0000838 x $100,000 = 8.38

As a general rule most pairs not ending in USD are around 8 pips and all pairs ending in USD are 10 pips. The only big exception to this is the EURGBP. This rule of thumb only applies to the majors.

The process is the same for any pair.

I am sorry, did you want pip value of the currency pair price in dollars?

If you want the market dealing price, just multiply the USDCHF * GBPUSD

1.1330 * 2.0460 = 2.3181

- | Joined Mar 2007 | Status: Member | 14 Posts

Thanks Scott for the reply. I interpret your response as an answer to 'how pip values are calculated for various cross pairs.' I am interested in how the actual market price of an exotic is calculated. For example:

Tonight we have a snapshot of the following prices:

USDCHF 1.1329 / 1.1335

EURUSD 1.4732 / 1.4736

I would like to know how the market makers justify their price for the EURCHF of 1.6683 / 1.6688

I am mentioning bid/ask just for info. The spread is not of any concern.

thanks,

Phil

Tonight we have a snapshot of the following prices:

USDCHF 1.1329 / 1.1335

EURUSD 1.4732 / 1.4736

I would like to know how the market makers justify their price for the EURCHF of 1.6683 / 1.6688

I am mentioning bid/ask just for info. The spread is not of any concern.

thanks,

Phil

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- | Joined Mar 2007 | Status: Member | 14 Posts

Sorry scott, didn't see your last line for multiplication.

Alles Klar

thanks

Alles Klar

thanks

DislikedThanks Scott for the reply. I interpret your response as an answer to 'how pip values are calculated for various cross pairs.' I am interested in how the actual market price of an exotic is calculated. For example: Tonight we have a snapshot of the following prices: USDCHF 1.1329 / 1.1335 EURUSD 1.4732 / 1.4736 I would like to know how the market makers justify their price for the EURCHF of 1.6683 / 1.6688 I am mentioning bid/ask just for info. The spread is not of any concern. thanks, Phil {image}Ignored