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Hedging GBP/JPY (Arbitrage trading system) Hedging GBP/JPY (Arbitrage trading system)
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  #11 (permalink)  
Old 07-14-2006, 06:05 PM
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Correct me if worng but i dont think FXCM is interest free, they do charge you swap interest rates
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  #12 (permalink)  
Old 07-14-2006, 08:22 PM
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why not just take the positive interest side of things with a good trade on a long term basis?
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Old 07-15-2006, 04:39 PM
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Lightbulb +4,929
I found two brokers, one gives +5 (swap long) GPBUSD, second takes –0.071 (swap short)…
5 - 0.071 = +4,929
One lot, one day? How much money $ it will be?

ANDy
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Old 07-15-2006, 05:17 PM
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For every 100k lot you have open, you should earn $4.93 per day. 10 lots = $49.30 per day. Not bad for having virtually no risk. You just need to be careful to continuously monitor your losing account and replenish from the winning account so you don't get a margin call. Can you tell us the names of the brokers?
Last edited by jperna21; 07-15-2006 at 05:52 PM.
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Old 07-15-2006, 05:19 PM
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It's not 49$ for 1 100k lot. It's 4.9$ if i'm not wrong.
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Old 07-15-2006, 05:31 PM
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Quote:
Originally Posted by eric79
It's not 49$ for 1 100k lot. It's 4.9$ if i'm not wrong.
It's 4.9$

ANDy
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Old 07-15-2006, 05:49 PM
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Sorry, my bad, forgot to move the decimal over one more spot. I just fixed above post. I wish I was correct!
Last edited by jperna21; 07-15-2006 at 05:53 PM.
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  #18 (permalink)  
Old 07-15-2006, 06:37 PM
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Lightbulb $ vs pips
Yes...
+5 swap long means $ per lot per day(first broker), and -0.071 swap short means points (pips!!!) per lot per day…

Next example:
1 day 1 lot USDCHF
first broker, swap short = -5.5$
second broker, swap long = +1 point = 25$ (am I right? or 10 $?)

25$ – 5.5$ = 19.5$

20 days = 390$

10 lots means 3900$ monthly?

ANDy


P.S. I made mistake! .... "+1 point = 25$" It is 25PLN (polish zloty), and only 8$, sorry...
Last edited by Andrew2; 07-27-2006 at 04:49 PM.
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Old 07-17-2006, 07:22 AM
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interest free broker
hi all here i have an interest free broker that i use to hedge
http://www.marketiva.com/

gr. leon
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Old 07-17-2006, 11:23 PM
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Quote:
Originally Posted by leon11
hi all here i have an interest free broker that i use to hedge
http://www.marketiva.com/

gr. leon
http://www.marketiva.com/index.ncre?...night-interest :
Quote:
Overnight Interest

Every currency and commodity has a "cost of carry" associated with holding the position for more than one day. It is called "overnight interest" or "premium". In currencies, this cost is a function of the "interest rate differential" of the two currencies that comprise the exchange rate.

For example, in USD/JPY, the interest rate differential is the difference between short-term U.S. interest rates and short-term Japanese interest rates. If, for example, U.S. interest rates are 5.0% and Japanese interest rates are 1.0%, the interest rate differential is 4.0% (5.0% - 1.0%). This means that if a trader was to sell USD/JPY, he would have to pay 4.0% of the notional amount of the contract per year to hold the position. If position quantity is 100,000, the trader would have to pay approximately $4,000 to hold the position for one year. This translates to approximately $11.00 per day for holding the USD/JPY position ($4,000 / 365).
Another thing : It's not true that when the quote moves you can transfert money from your winning accout to your loosing one : doing so you will loose the hedging...
So it's necessary to have the possibility to put more external monney on your loosing account. Also, many brokers don't allow a margin level below 100%, so, to be easy, your two accounts should have three times the used margin. In this case, the return is approx 133% annual with a leverage of 200. Not bad for a zero-risk investment !
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