How much is being Bought/Sold and which one? | Forex Factory

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How much is being Bought/Sold and which one?

  • #1
  • First Post: Feb 25, 2007 5:16am Feb 25, 2007 5:16am
If I have a 1 Lot Long GBPUSD, does it mean I bought GBP100K and sold USD196K?

If I have a 1 Lot Long GBPJPY, does it mean I bought GBP100K and sold JPY237M? Does it also mean that 1 lot Short GBPJPY, i sold GBP100K and bought JPY237M?

How about Long 1 lot NZDUSD? Does this mean I bought NZD100K and sold 70KUSD?

To Generalize, Long or Short, I always buy/sell 100K of the currency on the Left Side?

I appologize if this sounded "very novice" but Im getting major headache after crunching some numbers!
  • #2
  • Edited 1:12pm Feb 25, 2007 12:50pm | Edited 1:12pm
I
Quote
f have a 1 Lot Long GBPUSD, does it mean I bought GBP100K and sold USD196K?

If I have a 1 Lot Long GBPJPY, does it mean I bought GBP100K and sold JPY237M? Does it also mean that 1 lot Short GBPJPY, i sold GBP100K and bought JPY237M?

How about Long 1 lot NZDUSD? Does this mean I bought NZD100K and sold 70KUSD?

To Generalize, Long or Short, I always buy/sell 100K of the currency on the Left Side?
Yes .... your examples are correct

The ccy on the left is the "base" ccy of the quote and is always a value of 1
eg
1 GBP = 1.96 $
1 NZ$ = 0.70 US$
1 $ = 121 JPY
etc
  • #3
  • Edited 4:35pm Feb 25, 2007 2:48pm | Edited 4:35pm
Quoting BurgerKing
If I have a 1 Lot Long GBPUSD, does it mean I bought GBP100K and sold USD196K?

If I have a 1 Lot Long GBPJPY, does it mean I bought GBP100K and sold JPY237M? Does it also mean that 1 lot Short GBPJPY, i sold GBP100K and bought JPY237M?

How about Long 1 lot NZDUSD? Does this mean I bought NZD100K and sold 70KUSD?

To Generalize, Long or Short, I always buy/sell 100K of the currency on the Left Side?

I appologize if this sounded "very novice" but Im getting major headache after crunching some numbers!
Hi BK,

Firstly, I'm sure there will be numerous differences of opinion on what follows, but at least it should get the ball rolling.

Let's assume your account is Funded & Held in USD.
This makes Trading any of the USD pairs simple.
Buy GBP/USD means "Use the USD in my Account to Buy some GBP at my agreed leverage."

It gets a little more convoluted with the crosses.

Buy GBP/JPY means "Use the USD in my Account to Buy some JPY and Then use those JPY to Buy some GBP."

So, effectivly, You have 1)Sold Dollars for Yen to 2)Buy Pounds.
1) is an invisable, closed transaction which will be settled at the Mkt according to Time & Sales of Transaction. This will not show on your statement.
2) is an Open Trade which will have to be settled against the Yen and, again by an invisable closed transaction, back to your Account Held Currency (USD )

What was the Math you were trying to figure out? Does this help?
  • #4
  • Feb 25, 2007 4:35pm Feb 25, 2007 4:35pm
First I have to correct some of the math: Long GBPJPY, buy GBP 100K, sold JPY 23.7M (not 237M as earlier posted)...

I was trying to figure out a hedging system that is based on the amount of money involved.. have you heard of 3-way (or even 4 way) hedge?
  • #5
  • Feb 25, 2007 4:45pm Feb 25, 2007 4:45pm
Quoting BurgerKing
I was trying to figure out a hedging system that is based on the amount of money involved.. have you heard of 3-way (or even 4 way) hedge?
4 spreads/commissions to lock up 1 negative interest position? That must be a pretty mean system to cover all those costs.
  • #6
  • Feb 25, 2007 4:50pm Feb 25, 2007 4:50pm
Quoting BurgerKing
First I have to correct some of the math: Long GBPJPY, buy GBP 100K, sold JPY 23.7M (not 237M as earlier posted)...

I was trying to figure out a hedging system that is based on the amount of money involved.. have you heard of 3-way (or even 4 way) hedge?
I understand that your objective is to remove Luck from the equation, but, for that, I wish you Luck.
Let's look at it this way...
Predicting the directional movement of 1 {one} market requires a combination of Skill & Luck. {the grail for most.}
Predicting the directional movement of 2 {two} markets requires a combination of Skill & Fortunate Luck.{the grail squared}
Predicting the directional movement of 3 {three} markets requires a combination of Skill & Unusual Luck.{the grail cubed}
Predicting the directional movement of 4 {four} markets requires a combination of Skill & Exteme Luck.{a grail of the fourth dimension}

If your research is based in rollover Interest, The Borkers beat you to it and are covered.

Good Luck
  • #7
  • Last Post: Feb 26, 2007 2:44am Feb 26, 2007 2:44am
Brokers dont have the same Swap rates. Some gives more than what other charges.

Swap free brokers are aware of the dreaded GBPJPY shorts and they will drop the account if such position is held for several days... So why not use a different route to hedge a swap earning pair?

Found the holy grail? Lets just say I DID!
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