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mmont · 15-09-2006, 13:18

The AUJPY spread was 10 pips, while spread for AUDUSD was 4 and for USDJPY 3, so if you had open position in AUDJPY you would have payed 10 pips as spread. But with another alternative you could do following:
1. Say we want to go long in AUDJPY
we are buying AUDUSD and USDJPY, this means we are long in AUDJPY. As AUDUSD nad USDJPY changes the AUDJPY changes with their proportion too so profit/loss is the same. BUT you pay 4 pips + 3 pips = 7 pip as spread vs 10 pips.

Let me remind you how this discussion started. ( see above )
Your idea was to save 3 pips on a A/J trade by spreading A/U and U/J.
Which you contend is the same as entering an A/J trade.
I gave you an actual quote that showed you would have been down 32 pips with such a trade at a particular moment.
No responce.
Your posted senario is full of assumptions and not backed by any actual price movement.
Plus you have the temerity to say " RISK FREE ".
FX 101 ...there is no free lunch and two crosses do not a cross rate make.
PERIOD...
I REMEMBER, IT HAPPENED ON.... ANY BAR CHART YOU CARE TO LOOK AT.
Follow your own advice and open your mind, man.

Still Friends.

15-09-2006, 13:18	#11
mmont level 2 Join Date: Sep 2005 Posts: 99 Downloads: 0 Uploads: 0 Rep Power: 4	Re: Beating the spread The AUJPY spread was 10 pips, while spread for AUDUSD was 4 and for USDJPY 3, so if you had open position in AUDJPY you would have payed 10 pips as spread. But with another alternative you could do following: 1. Say we want to go long in AUDJPY we are buying AUDUSD and USDJPY, this means we are long in AUDJPY. As AUDUSD nad USDJPY changes the AUDJPY changes with their proportion too so profit/loss is the same. BUT you pay 4 pips + 3 pips = 7 pip as spread vs 10 pips. Let me remind you how this discussion started. ( see above ) Your idea was to save 3 pips on a A/J trade by spreading A/U and U/J. Which you contend is the same as entering an A/J trade. I gave you an actual quote that showed you would have been down 32 pips with such a trade at a particular moment. No responce. Your posted senario is full of assumptions and not backed by any actual price movement. Plus you have the temerity to say " RISK FREE ". FX 101 ...there is no free lunch and two crosses do not a cross rate make. PERIOD... I REMEMBER, IT HAPPENED ON.... ANY BAR CHART YOU CARE TO LOOK AT. Follow your own advice and open your mind, man. Still Friends.