TAILIEUCHUNG - Strategies Getting Started in Currency Trading_11

Tham khảo tài liệu 'strategies getting started in currency trading_11', kinh doanh - tiếp thị, quản trị kinh doanh phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | Computers and FOREX 269 TABLE Calculations for Cross Currencies Pair Rate Calculation Deviation Pip Values CHFJPY 556 pips EURCHF pips EURGBP pips EURJPY pips GBPCHF pips GBPJPY pips TABLE Transaction Cost EUR USD 2 USD JPY 3 EUR JPY 3 An eight-pip transaction cost to earn a four-pip profit is counterproductive it amounts to a four-pip loss . If the parity deviation the number of pips by which the three currency pairs are out of alignment were greater say 30 pips then a definite arbitrage opportunity exists. The trading mechanism to take advantage of this anomaly requires some consideration. First determine what market actions are necessary to correct this anomaly. Assume that the EUR JPY rate is currently trading at and the calculated rate using the current EUR USD and USD JPY pairs is a 30-pip deviation . Parity between the three currencies will be restored if the following price action occurs The EUR JPY pair rises to or The product of the EUR USD and USD JPY pairs drops to Therefore the following trades are required to lock in the 30-pip profit Buy one lot of the EUR JPY pair. Sell one lot of the EUR USD pair. Sell one lot of the USD JPY pair. Liquidate all three trades simultaneously when parity is reestablished. Warning Executing only one or even two legs of the three trades required in an arbitrage package does not guarantee a profit and may be quite dangerous. 270 EXTRA FOR EXPERTS All three trades must be executed simultaneously before the locked-in profit can be realized. EXAMPLE 2 Two USD pairs and one cross pair divide The previous example uses the product of the two USD currencies to calculate the cross rate. An example of the ratio of the two USD currencies follows. Assume the EUR GBP cross pair is currently trading at and that .

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