Inflation in things we need, Deflation in things we want.
Synthetic Hedge Reboot Discussion 1 reply
Question for synthetic and non-synthetic currency pairs 0 replies
Is it possible to try a synthetic Hedge 9 replies
Making a synthetic Gbp/Jpy order 15 replies
DislikedSo instead of just selling 1lot EURJPY I would want to create the xUSD synthetic hedge
by selling .... lots EURUSD
and selling .... USDJPY
Is there anyone good at explaining the math ? ;0
Thanks in advance
ThijsIgnored
Quoting ThijsDislikedNow what iff I want to hedge let's say EURUSD short
using:
EURJPY (Short) and USDJPY (Long)
How do I have to calculate my lotsize then ?Ignored
QuoteDislikedIf we want to go long X/Y, then we go long both X/USD and Y/USD.
QuoteDislikedIf we want to go long X/Y, then we go long both X/USD and USD/Y.
DislikedI am not entirely sure why you would want to do this, unless there is some sort of arbitrage you are looking to hit (even so, there may be better pairs for you to choose).Ignored
DislikedDo you know or have a spreadsheet/indicator that can make these calculations somewhat easier ?Ignored
DislikedI´m not sure if it was mentioned in the article, but pip values change as a function of price. Therefore, for a perfect hedge you´ll need to continuously adjust the the lot sizes.
Also, a source of profit for most retail brokers is the skew of interest rate swaps. You pay a higher swap in one direction, than you receive if you have a position in the other direction.Ignored