FX Hedges – Quantitative Trading Platform

1 Star2 Stars3 Stars4 Stars5 Stars (1 votes, average: 5.00 out of 5)
Loading...Loading...
Buy now

You want it?

  • Definition
  • Mathematical Model
  • Videos

FX Hedges is based on hedging strategy. It shows graphically average moving and deviation of multiple hedges.

  • A hedge is a set of assets that are neutral to the market, or another way, does not have directionality. For instance:

buy EURJPY    sell USDJPY    sell EURCAD    buy USDCAD

  • One of the characteristics of a hedge is that all currencies are neutralized, since all its assets are “balanced”.
  • The most important feature is the low volatility that the set has with the decrease of directional risk, which makes them really attractive, especially with large positions.
  • With these strategies many operations are generated, so it can be a tool for generating volume neutral to market.

FX Hedges shows graphically variations caused by the volatility of currencies, allowing the development of highly secure and market-neutral strategies.

The main condition to build a hedge is the neutrality respect the market trend. All of the currencies have to be “balanced”.

Let’s see an example of the difference between EURUSD trends through JPY and CAD.

STEPS:

  1. Choose the reference asset: EURUSD

 

  1. Build the paths:
  2. EURUSD (1) = EURJPY – USDJPY
  3. EURUSD (2) = EURCAD – USDCAD

Hedge = buy EURUSD (1) – sell EURUSD (2) = neutral

Hedge = (EURJPY – USDJPY) (EURCAD – USDCAD)

Don’t wait any more

Try our trading platforms one week for free

Description

Share this

Platform for trading strategies based on hedging.

Project Details

Client
Date November 18, 2015
Categories Tools

Uso de cookies

Este sitio web utiliza cookies para que usted tenga la mejor experiencia de usuario. Si continúa navegando está dando su consentimiento para la aceptación de las mencionadas cookies y la aceptación de nuestra política de cookies, pinche el enlace para mayor información.

ACEPTAR