Free Forex Arbitrage Calculator for PDA 1.0 Download
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Forex Arbitrage Calculator for PDA 1.0 Download

Forex Arbitrage Calculator for PDA 1.0

License: Shareware $19.00
Downloads:
Publisher: AdvMathAppl
File size: 108KB
OS: Palm OS
Date added: 2009-10-27
Homepage: http://www.advmathappl.com
Category: Business

Forex Arbitrage Calculator for PDA 1.0 Description

"Forex Arbitrage Calculator allows to determine risk free arbitrage opportunities"


Editor: Forex Arbitrage Calculator determines risk free arbitrage opportunities on forex cross rates.

Forex Arbitrage is an arbitrage among real rates and synthetic cross rates in different local markets.
For example, suppose a trader has accounts with forex brokers in New York, Tokyo, and London. As far as local quotes are determined by local players, there are sometimes arbitrage opportunities among different Locations. In our case the real rates are gbp/usd 1.6388 1.6393 (NY), eur/usd 1.1832 1.1837 (Tokyo), and the cross rate eur/gbp is 0.7231 0.7236 (London)

In such situation exists risk-free arbitrage opportunity with estimated profit equal to $13.1 on a mini contract. Indeed buying 100,000 EUR for $118,370 (10 mini lots or a one standard lot), and selling 100,000 EUR for 72,310 GBP, and selling 72,310 GBP for $118,501 gives zero exposures in EUR and GBP with profit of $131.
Such arbitrage is possible if the trader's positions are netting (clearing) by some "clearing house".

A one possible way to realize this strategy is to find three brokers having the same clearing firm. Then you should make agreement with this clearing firm on "netting" services. It means that clearing firm will clear (net) your positions across three pairs at specified time using the opening rates. For example, in the example above suppose you had opened the following positions long 100,000 EUR/USD; short 100,000 EUR/GBP; and short 72,310 GBP/USD at 10:00AM and instructed the clearing firm to clear these position at 16:00 PM at the opening rates. The netting/clearing gives the following results: Long EUR from the first pair and short EUR from the second pair gives zero Exposure in EUR. Long position in GDP from the second pair and short position from the third pair gives zero exposure in GBP. Short position from the first pair ($118,370) in USD and long position from the third pair ($118,501) in USD gives you $131 profit without open positions and exposures. you can free download Forex Arbitrage Calculator for PDA 1.0 now.

Forex Arbitrage Calculator for PDA 1.0 Keywords

arbitrage calculator, forex arbitrage, forex calculator, arbitrage

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