Is this hedging?

[Nonpiker]

Jezek,

Thanks a lot for the compliment. I was not referring to your statement, I just made the comment so people realize that USDCHF is not a perfect "hedge" for a EURUSD trade.

[bodebliss]

I always thought hedging in FOREX was for companies adversely effected by swings in currency rates on their trade decisions.

Here's an articles:

http://www.investopedia.com/articles.../04/122204.asp

[cornellj]

Originally Posted by bodebliss

I always thought hedging in FOREX was for companies adversely effected by swings in currency rates on their trade decisions.

Here's an articles:

http://www.investopedia.com/articles.../04/122204.asp

Why should hedging be the sole ownwership of companies affected by swings in currencyrates on their trade decisions? I am also affected by swings in currency rates on trade decisions in my business, so are you and everybody else no matter what you do or what business you are in. It makes sense therefor to hedge your exposure to risk by the use off hedging principles. I use hedging for a number of reasons in my property, stock investments and CFD trading.

[Paesano]

Lyubomir,

fficeffice" />>>

I don’t fault you for thinking hedging is being long and short the same ccy pair, b/c in this unregulated fx world, firms can say this on their website. Hedging is being open in the spot market and hedging it with an option (which uses a lot less funds in case the option losses)

>>

In your definition, you are assuming you take off 1 pair for a profit and the losing pair comes back? You’re trying to be single and married at the same time to only get the benefits of each situation…..

[DAT]

Paesano,

Great post, I could not put it better myself. The problem with the forex industry is that numerous companies put things on their sites and claim that they are true and "clients" never do any reading but take these things as gospel. Hedging, FDIC insurance, Guaranteed stops all that stuff.

Anyway I digress nice post!!

[bodebliss]

Originally Posted by Paesano

Lyubomir,

fficeffice" />>>

I don’t fault you for thinking hedging is being long and short the same ccy pair, b/c in this unregulated fx world, firms can say this on their website. Hedging is being open in the spot market and hedging it with an option (which uses a lot less funds in case the option losses)

>>

In your definition, you are assuming you take off 1 pair for a profit and the losing pair comes back? You’re trying to be single and married at the same time to only get the benefits of each situation…..

That's a great example!

[Gamma_Jammer]

Originally Posted by Nonpiker

Jezek,

Thanks a lot for the compliment. I was not referring to your statement, I just made the comment so people realize that USDCHF is not a perfect "hedge" for a EURUSD trade.

You're like an addict aren't you NP? You just can't resist it. Remember all the hair pulling and teeth gnashing last time? Why man? Why are you putting yourself through this again mate. Don't waste your time on this - there must be a decent bar or something near you ;-)

GJ

[Nonpiker]

Hey Gamma,

You know something your right. I need to leave it alone...haha