Triangular Arbitrage Step-by-Step | Forex
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Step-by-step understanding of the triangular arbitrage concept in currency markets
Comments
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Hi, how to identify the sequence of triangular arbitrage?
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very clear explanation and demonstration. Thank-you
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how to identify the cross rate ?
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terima kasih bapak/ibu, penyenggara hal ini di YouTube.
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Very useful video. But I've still got confuse in some place in my exercise.
Q: The following exchange rates are available to you
Fuji Bank ¥120/$
Rushmore bank SF1.6/$
Matterhorn bank ¥80/SF
Assume that you have SF10,000,000. Calculate two transactions using triangular arbitrage and demonstrate whether it is possible to make a profit.
Thank you:) -
When starting with Bank C why do you divide 100,000,000 yen by 128 and then multiply the other 2 (bank B and A)?
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Thank you so much! It's easier to do this even with bid-ask quotes!
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thank you so much!
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Very useful! More useful than my current lecture notes! Thankyou!
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Thank you It Did Help. All The Best.
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Great explanation, thank you so much.
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thank you SO much
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What should we do if 1000000 is given in $ ?
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Could you include an example that includes the bid-ask/offer spreads included in this calculation. Also, many arbitrageurs lever themselves, as the risk is mitigated. I would want to see an example where the arbitrageur starts with 0 units of currency. The first step would be borrowing at spot rate in base currency, conversion to price currency, sell forward against base currency, lend price currency for 90 days at price domiciled interest rate, then convert back to base currency, and pay back interest on initial borrowing with proceeds of lending in price domiciled country. You might have a nice little arbitrage profit. And start with 0 currency units.
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Great video! Although, I think by around 2 minutes the slides were out of sync with the audio. But I still understood a lot. Thanks!
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Thanks, that's what I needed!
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very very useful.. thank u..
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tooo much useful !!!!!
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Great video thanks mate
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Currencies are generally paired with the US dollar. When a currency is paired with another currency that is not a US dollar, we have a cross-rate. So when the yen is paired with the British pound, we have a cross-rate of 128 yen per British pound.