I've seen some posts where people talk about being long and short the same pair (ex: EURUSD), and they seem to have these complex hedging strategies that involve quite a bit of math. I'm not getting it.
Back when I was a stockbroker, I would occasionally have a client go short against the box (long & short same security, net zero position) to lock in profits but to put off capital gains for a short period. I can't really see any other reason to be long and short the same pair.
Am I missing something? Doesn't this just chew up margin, cost additional commision/spread, and leave you in a net negative swap position?
Back when I was a stockbroker, I would occasionally have a client go short against the box (long & short same security, net zero position) to lock in profits but to put off capital gains for a short period. I can't really see any other reason to be long and short the same pair.
Am I missing something? Doesn't this just chew up margin, cost additional commision/spread, and leave you in a net negative swap position?