Pips vs Percent

mokwit · Jun 10, 2013

Really dumb question I know - especially in light of my background but:

Is 0.2% directly or roughly equivalent to 20 pips?

e.g. if a broker is quoting me 0.2% away from interbank rate is that comparable with a 20 pips away from interbank quote?.

TIA

Pippi436 · Jun 10, 2013

You are unable to calculate 0.2% of a FX rate?

mokwit · Jun 10, 2013

Quote from Pippi436:

You are unable to calculate 0.2% of a FX rate?

Needs to be done realtime in the window before I get quoted "your risk" for taking too long. Will set up a RT excel spreadsheet for this and yes it will include a percentage calculation which I should be able to program, but right now I am asking the question above and don't really think your question for answer is valid.

Appreciate it if someone who actually knows could answer - probably will turn out not to be one of the many ET'ers who trade FX from the beach for a living using their smartphone

Pippi436 · Jun 10, 2013

EUR/USD px is 1.3215, 0.2% of that is 0.0026 so its 26 pips in this case. Its not exactly rocket-science..

mokwit · Jun 10, 2013

Quote from Pippi436:

EUR/USD px is 1.3215, 0.2% of that is 0.0026 so its 26 pips in this case. Its not exactly rocket-science..

Thx. As I said it was a dumb question but I had a reason for asking it.

Pippi436 · Jun 10, 2013

You may have mok, but possibly lack in wit..

mokwit · Jun 10, 2013

Quote from Pippi436:

You may have mok, but possibly lack in wit..

Yeah, but I can afford to pay people to come and fetch me inside when it starts raining.*

*English saying: "So stupid has to be told to come in out of the rain"

Pippi436 · Jun 10, 2013

What is this for? 26 pips transaction cost is nasty in the liquid paris. Surely your broker can do better?

mokwit · Jun 10, 2013

Quote from Pippi436:

What is this for? 26 pips transaction cost is nasty in the liquid paris. Surely your broker can do better?

Funds transfer across borders/currencies not trading. Banks rip for 3% per side so 0.2% aint bad in comparison. If you are a corporatev treasurer you can negotiate play them off - I am not that size.

Pippi436 · Jun 10, 2013

You could use IB or Oanda for major ccys, if you don't transfer to 3rd parties.

Oanda had a really competitive physical delivery service, with which you could transfer to 3rd parties too. They charged a $25 flat fee per transaction, and the FX rates were tight(1 to 2 pips in the majors). But they had to stop it due to changes in regulation. These bank rates are such a rip off.