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[branac]

Thank you for the reply patrick, but what I don't understand is: those accounts are with two different brokers. So if you don't have money on the one which is going against you, you will get a marging call or something.
So, I guess you transfer earned money from one account to another?


branac

[yardie]

You can go with a broker that supports hedging to resolve that problem.

Originally Posted by branac

Thank you for the reply patrick, but what I don't understand is: those accounts are with two different brokers. So if you don't have money on the one which is going against you, you will get a marging call or something.
So, I guess you transfer earned money from one account to another?


branac

[bhale]

yardie, if you do that, then you are negating your interest. Right? If I'm wrong, please show me becuase my broker supports hedging and I would like to use this technique.

[yardie]

Doesnt the two broker thing works pretty much the same way where the interest is negated? I am not familiar with the strategy so I cannot comment much about it.

Originally Posted by bhale

yardie, if you do that, then you are negating your interest. Right? If I'm wrong, please show me becuase my broker supports hedging and I would like to use this technique.

[simon5]

who are the brokers that dont charge interests???

[branac]

I only know about Marketiva, they don't charge interest.

[hitman2000]

So what about that double spread ?

[simon5]

thanks branac, i will check it

[patrick_fx]

Originally Posted by yardie

You can go with a broker that supports hedging to resolve that problem.

Hi Yardie,

What do you mean by "broker that supports hedging"? Does it mean that you can hold both short and long positions of the same pair at the same time (my broker doesn't allow that)? Could you please explain?


Thanks,
Patrick

[patrick_fx]

Originally Posted by branac

Thank you for the reply patrick, but what I don't understand is: those accounts are with two different brokers. So if you don't have money on the one which is going against you, you will get a marging call or something.
So, I guess you transfer earned money from one account to another?
branac

If you plan to use two brokers (traditional broker and interest free broker), then transferring money from a profitable broker to a near margin call broker is somewhat risky. If the money doesn't arrive in time, your account will be liquidated. I always leave some room; never used up all/most available margin. IMHO, how much margin should you leave is really depend on three things: your comfort level, the pairs you trade, and your trading style (long term traders would need more cushion than short term traders).

Someone already suggested to use brokers who allow hedging. If what I understood was corrrect, then that would be even better than using two different brokers. You could better utilize your available margin with one broker that allows hedging.


Hope it helps,
Patrick

[bhale]

fx solutions actually has a button labeled Hedge to put on a hedge, but it just enters and order to go the other way on the same pair, but I'm looking at the rates right now, and these are dollar figures. If I bought and sold GBPJPY, I'd be -1.40, USDJPY - .65. The only way I see any positive interest is to buy USDCHF and EURUSD at the same time. Since these are negative correlated pairs you get the same thing as buying/seliing EURUSD, and you get a positive 1.01 interest. This is using same broker.

[crucian]

There is also another way to do this using the same broker.

Find 2 currency pairs that go in opposite direction and on which you will be getting interest (you have to go long on both of them, but one will be making money, and one will be loosing money) That way, your balace won't change but you will get the interest money. I do this all the time and use a canadian broker that has 2 pip spread on all currency pairs: f o r e x s e r v i c e s c a n a d a . c o m

[Nonpiker]

Originally Posted by patrick_fx

If you plan to use two brokers (traditional broker and interest free broker), then transferring money from a profitable broker to a near margin call broker is somewhat risky. If the money doesn't arrive in time, your account will be liquidated. I always leave some room; never used up all/most available margin. IMHO, how much margin should you leave is really depend on three things: your comfort level, the pairs you trade, and your trading style (long term traders would need more cushion than short term traders).

Someone already suggested to use brokers who allow hedging. If what I understood was corrrect, then that would be even better than using two different brokers. You could better utilize your available margin with one broker that allows hedging.


Hope it helps,
Patrick

If you use one broker who is only going to pay you on one side and not make you pay on the other? No one is going to give away funds for free. While in theory it sounds like free money but it is not that easy. NZDJPY is a higher yielder if your broker does not have flat margin requirements. GPBJPY should earn you around 17 pips a week and NZDJPY should be like just shy of 10. So crossing the spread once takes away one weeks earnings and if you have to move funds due to a liquidation you will be severly cutting into your earnings. Also brokers are not naive to the strategy and may start charging you fees if you stay short high yielders over time.

[hitman2000]

Originally Posted by crucian

There is also another way to do this using the same broker.

Find 2 currency pairs that go in opposite direction and on which you will be getting interest (you have to go long on both of them, but one will be making money, and one will be loosing money) That way, your balace won't change but you will get the interest money. I do this all the time and use a canadian broker that has 2 pip spread on all currency pairs: f o r e x s e r v i c e s c a n a d a . c o m

Can you tell us wich currency pairs are you using ? I was trying this strategy on EURUSD with USDCHF but if I`ll go long on them I will earn interest on EUR & lose on CHF. I am using O&A. Thank you for your reply

[apfx]

I'm not sure if you pay or get the interest rate differential trading FX futures,
but if not...
using Spot FX (paying interest) and hedge with FX futures would be the game to play.