Large FX position sizes

V

vshanks43

Hello everyone.

I'm curious as to institutions manage risk on a very large position size (think 20 standard lots or more).
First off, does anyone even trade such large lot sizes?
Second, if they do, how does the execution risk management work? I mean how do block trades executions work in the FX market?

I'd really appreciate it if someone could give me an answer.

thanks!
 
20 standard lots = 2 million dollars. :D:D You think it is huge size :D

Institutions trade 5-10 million dollars in a clip (clip = 1 trade). They often have positions upto 20-50-100 million dollars in a currency.
 
Thanks for making me laugh, 20 lots!

The majority of people that talk FX in lots are retail traders dealing out of such global FX powerhouses as Cyprus and the Maldives.
 
gmst said:
20 standard lots = 2 million dollars. :D:D You think it is huge size :D

Institutions trade 5-10 million dollars in a clip (clip = 1 trade). They often have positions upto 20-50-100 million dollars in a currency.
More...

How much do you think is needed from institutions to move a less liquid pair, say exotic pairs?

I am thinking 1 bln + ? Usually FX Option expiries levels above the billion volume tends to -move- the price several pips in liquid pairs. What are your thoughts on this?
 
rubb said:
How much do you think is needed from institutions to move a less liquid pair, say exotic pairs?

I am thinking 1 bln + ? Usually FX Option expiries levels above the billion volume tends to -move- the price several pips in liquid pairs. What are your thoughts on this?
More...

you would be surprised how little can move fx pair outside busy hours.
 
toolazy said:
you would be surprised how little can move fx pair outside busy hours.
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Yes, a hedge fund trader once told me that he could move EURUSD 2 or 3 pips for about 50 MM in low trading activity sessions or times , I don't know if this could be true or not as I have not experienced this myself.

I am talking more of a longer moves, like shaking out of weak hands. In the stock market you can see the real volume and have an idea of how much contracts were needed for a shake out, but in spot currency? How much would you need, in your opinion?


Regards
 
my account at IB has about 50k and I can open a $5m position.. problem is; thats $500 a tick! which while only 1% account will make most people sweat. i floated 1m once just for kicks and got out with 2 pips!! but id rather play roulette at a casino if thats the case.

with institutional portfolios trades are normally NOT done for naked outright directional bets.. its all structured/spreading/hedged.. I worked for an IB and the prop desks had daily PnL swings of a few million dollars depending on the instrument..(usually as a profit and no bid deal)
 
rubb said:
How much do you think is needed from institutions to move a less liquid pair, say exotic pairs?

I am thinking 1 bln + ? Usually FX Option expiries levels above the billion volume tends to -move- the price several pips in liquid pairs. What are your thoughts on this?
More...

Depending on the currency pair among exotics, 50 million can move a pair 20-30 pips. You can move E/U 20-30 pips with 1 billion. Cheers!
 
gmst said:
Depending on the currency pair among exotics, 50 million can move a pair 20-30 pips. You can move E/U 20-30 pips with 1 billion. Cheers!
More...

Very interesting, thanks for this mate. Cheers :)
 
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