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Complete hedge

  • #1
  • First Post: Jan 2, 2008 1:15pm Jan 2, 2008 1:15pm
Hi everybody,

I find the below is the complete hedge but we have to think about the spread and interest.

1 EURUSD to buy
1 EURGBP to sell
0.7 GBPUSD to sell

Anyone who has better solution to this hedge will be a billionaire.
  • #2
  • Jan 2, 2008 1:24pm Jan 2, 2008 1:24pm
If you look carefully at this "hedge", you'll realize that all you've done is simultaneously bought and sold each of the individual currencies. You'll end up with a net loss from having to pay the spread.
Domo Arigato, Mr. Roboto!
  • #3
  • Jan 3, 2008 2:27am Jan 3, 2008 2:27am
Quoting kit2111
Hi everybody,

I find the below is the complete hedge but we have to think about the spread and interest.
1 EURUSD to buy
1 EURGBP to sell
0.7 GBPUSD to sell
Anyone who has better solution to this hedge will be a billionaire.
Where did get '0.7' figure for gbpusd to have the exact equivalent hedge?

Is there a table to show the right ratios for major and cross pairs to hedge?
  • #4
  • Jan 4, 2008 7:58am Jan 4, 2008 7:58am
Quoting scalpmaster
Where did get '0.7' figure for gbpusd to have the exact equivalent hedge?

Is there a table to show the right ratios for major and cross pairs to hedge?

I have backtested one year data and almost no change but we loose only spread and interest but I think there is a hidden secret to get pips.
  • #5
  • Last Post: Jan 4, 2008 8:59am Jan 4, 2008 8:59am
Just a thought....if u are completely hedge u have no exposure...no chance of making money
100% of traders are losers. Just that some win more than they lose!
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