Daily Boom

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AtW replied

19 January 2010, 22:05
Originally posted by DiscoStu View Post

I'd love to have a coherent argument, but I'm pretty wasted. Maybe tomorrow...

Anytime old chap!
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DiscoStu replied

19 January 2010, 22:04
Originally posted by AtW View Post

An exporter that exports from Country with currency A to Country with currency B may wish to buy call option to exchange currency B to currency A to reduce currency risk.

That's a normal financial operation that is done in the course of normal business - it does not pursue goal to enrich oneself on constantly changing exchange rates, no - all it does is provides some certainity by reducing currency risk in exchange for some known cost.

I'd love to have a coherent argument, but I'm pretty wasted. Maybe tomorrow...
Leave a comment:
AtW replied

19 January 2010, 21:45
Originally posted by DiscoStu View Post

Bollocks it wouldn't.

An exporter that exports from Country with currency A to Country with currency B may wish to buy call option to exchange currency B to currency A to reduce currency risk.

That's a normal financial operation that is done in the course of normal business - it does not pursue goal to enrich oneself on constantly changing exchange rates, no - all it does is provides some certainity by reducing currency risk in exchange for some known cost.
Leave a comment:
DiscoStu replied

19 January 2010, 21:41
Originally posted by AtW View Post

It would not be speculation, which in Wikipedia defined as: "In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum"

A long term call option on a currency would be a hedging operation, perfectly valid use of derivatives. There is good economic sense in it, unlike spread betting and buying/selling such options all day long just to make money on difference in rates.

Bollocks it wouldn't.
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DiscoStu replied

19 January 2010, 21:41
Originally posted by Tingles View Post

SPECULANT!

SPEKULANT
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AtW replied

19 January 2010, 20:00
Originally posted by Tingles View Post

SPECULANT!

It would not be speculation, which in Wikipedia defined as: "In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum"

A long term call option on a currency would be a hedging operation, perfectly valid use of derivatives. There is good economic sense in it, unlike spread betting and buying/selling such options all day long just to make money on difference in rates.
Leave a comment:
Tingles replied

19 January 2010, 17:52
Originally posted by AtW View Post

shared prosperity

GBP/EUR exchange rate is

Maybe I should have bought a derivative on GBP last year

SPECULANT!
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AtW replied

19 January 2010, 17:38
Originally posted by DimPrawn View Post

Sit back and enjoy the prosperity.

shared prosperity

GBP/EUR exchange rate is

Maybe I should have bought a derivative on GBP last year
Leave a comment:
DimPrawn started a topic Daily Boom

19 January 2010, 17:34
Daily Boom

http://www.telegraph.co.uk/finance/e...economies.html

Boomed!

Gordon is our saviour.

Sit back and enjoy the prosperity.
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