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Originally Posted by mrbrint
good stuff, thanks
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Yes,
Good post, but I'd still be mindfulof the the fact that it's a tad more complex than that. For example with the EUR/USD + USD/CHF positions in the example given, the one thing that can catch you out is a dramatic move in EUR/CHF (which is effectively pretty much what you hold (depending on the relative sizes of the two positions.
This pair, while fairly sedate most of the time, tends to move a lot during times of geopolitical tension (when people rush to Swissy as a safe haven currency). SO at the time when you may most want protection from volatility, that protection is at risk of evaporating.
My $0.02 as usual
GJ