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Hello drwar,
Thursday, November 25, 2004, 8:31:10 AM, you wrote:
d> Not an expert on this but it Logically seems equivalent except if the
d> resultant movement does not produce an equal or greater dollar expectation
d> as the EURAUD for the same move.
d> -----Original Message-----
d> From: C [mailto:camacazi@xxxxxxxxxxxx]
d> Sent: Thursday, November 25, 2004 1:44 AM
d> To: omega-list@xxxxxxxxxx
d> Subject: fx quandries
d> Howdy
d> I have a system that works well with a FX spot of the EUR vs AUD [or EURAUD
d> meaning euro /aust dollar]
d> anyways the spread of the bid and ask of the EURAUD is like 14 pips [ie bid
d> is 1.6729 and the ask is 1.6743] so basically the commisiion is like 14 pips
d> or in other words 140$ commission :O( which is bad.....
d> But.....
d> looking at the bid/ask of the EUR vs USD its spread is 3 pips [ie bid is
d> 1.3181 and the ask is 1.3184] which is good 30$
d> ....and....
d> looking at the bid/ask of the AUD vs USD its spread is 3 pips [ie bid is
d> .7875 and the ask is .7878] which is also good 30$
d> so isnt buying 100k of of Eur/AUD the same as Buying 100k of the EUR/USD and
d> Selling 100k of the AUD/USD ? [which costs in spreads 2*30$ which is better
d> than the spread of the EUR/AUD of 1*140$?]
d> or am i missing something?
Yes, that's called symmetry in foreign exchange markets. Same applies
to options as well, although getting the strikes right requires
knowing how to do this.
Best regards,
Ivo Karindi
ivo@xxxxxxxxx
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