I'm looking for some advice about how to hedge out euro currency risk. I just started trading my own money and I'm worried down the line about converting over my profits. I don't want to be in a crunch and have to pay $1.19 or somehting awful like that. Any ideas are welcome...
US traders of eurex
- Thread starter sidchitown
- Start date
Whatever you do will require much more effort than it is worth unless you are taking $5k a day or so out of the markets. I just convert my entire group's accounts on a consistent day once a month. In the long run, I have found that when I convert... doesn't make much of a difference.
Dear Sir
hedge or win ? It is two different task .
If hedge -
a. buy two equal quantity of the money
1000 euro and 1253.1 $
b. synthetic asset
buy 1 future eur/usd sell one call option
and buy one put with equal strike price
sell 1 future eur/usd sell one put
and buy one call with equal strike price
If you wish win , that is another task which related to
your advantage as operator , wining-loss and risk-reward ratio
In each case better participate on currency future market as spot market ,as last have not pure agents ,but only bucket shop
/broker take another side of the client order ,also UBS/
and this ,which promouted as pure agents -hotspotfx and IB
reflected in he's books only 1% of the market /statement of IB/
Sorry ,if author not understand your question correctly
hedge or win ? It is two different task .
If hedge -
a. buy two equal quantity of the money
1000 euro and 1253.1 $
b. synthetic asset
buy 1 future eur/usd sell one call option
and buy one put with equal strike price
sell 1 future eur/usd sell one put
and buy one call with equal strike price
If you wish win , that is another task which related to
your advantage as operator , wining-loss and risk-reward ratio
In each case better participate on currency future market as spot market ,as last have not pure agents ,but only bucket shop
/broker take another side of the client order ,also UBS/
and this ,which promouted as pure agents -hotspotfx and IB
reflected in he's books only 1% of the market /statement of IB/
Sorry ,if author not understand your question correctly
Sounds really funny to me.
If you think you are capable "trading your own money", why don't you trade a bit EUR or so on the side. That should do the trick. No need whining at ET's about 'euro currency risk'. That's why people trade currency futures.
P.S.
Clear both methods depend ,where operator is based
and what he will make after money would converted back.
Both have limitations
Not only exchange ratio ,but relation to CPI would changed
To answer this questions you must take simple example
Startcapital 2000$ =2000$
To start date
Exchange ratio eur/usd 1:1
Bottle of wisky price = 20$= 20 euro manufactured in USA
Bottle of cognac = 50$ = 50 euro manufactured in Europha
Operator can be based in Europha / have made 30% with
asset in USA and after one year need euro back/ or in
USA /have made 30% with asset in Europha and after one
year need USD back/
Or operator will buy most quantity of whisky or most
quantity of cognac for best offer in EU or USA
Take case after one year euro/usd changed from 1:1 to 1:1.25 and take case after one year euro/usd changed to
1:0.8 . Operator can buy whisky and cognac after year of speculation in each continent for best offer .
Price of whisky and cognac would react different to eur/usd relation change .
Take also case that after one year one of the broker in USA or in Eurpoha can be crashed through terroristic act or take your money to he's pocket .
And think what you will hedge ...
CME have CPI futures ,but volume possible very small
Best wish ....
Clear both methods depend ,where operator is based
and what he will make after money would converted back.
Both have limitations
Not only exchange ratio ,but relation to CPI would changed
To answer this questions you must take simple example
Startcapital 2000$ =2000$
To start date
Exchange ratio eur/usd 1:1
Bottle of wisky price = 20$= 20 euro manufactured in USA
Bottle of cognac = 50$ = 50 euro manufactured in Europha
Operator can be based in Europha / have made 30% with
asset in USA and after one year need euro back/ or in
USA /have made 30% with asset in Europha and after one
year need USD back/
Or operator will buy most quantity of whisky or most
quantity of cognac for best offer in EU or USA
Take case after one year euro/usd changed from 1:1 to 1:1.25 and take case after one year euro/usd changed to
1:0.8 . Operator can buy whisky and cognac after year of speculation in each continent for best offer .
Price of whisky and cognac would react different to eur/usd relation change .
Take also case that after one year one of the broker in USA or in Eurpoha can be crashed through terroristic act or take your money to he's pocket .
And think what you will hedge ...
CME have CPI futures ,but volume possible very small
Best wish ....