pipscalper wrote:FoxerFx, based on the 02/09/07 closing prices, my calculations came to the following:
Short 100K EUR/USD
Short 130135 USD/CHF
Long 100K EUR/CHF
However, I still doubt that there is no exposure because as the rates change so are the ratios.
The FX quotes = rates = ratios. When one ratio comes up, the other must inevitably come down. Aside from numerous other aspects, from this simplistic point of view you neither gain nor lose.
Imagine that as a seesaw: the average
height above ground of the two people on the seesaw is still the same
no matter what's the particular position of any one of them:
Anyways, it is close enough.
No, it's not wishy-washy. It's exact.