black swan, let’s say you want to buy euro -> use bid 1 US dollar gives you 1 Euro. if you want to sell Euro, use ask -> 1 Euro gives you 1/1.0015 dollars. To make it simple, you lose on every transaction.
Up the bid Down the ask
ilvino Wrote: ------------------------------------------------------- > niblita would you please explain the up the bid > down the ask thing? If up go up the bid you convert the currency in the denom to the currency in the numerator When you go down the ask you convert the currecy in the numerator to the currency in the demoninator
get screwed!!! less filling! tastes great! whatever floats your boat, sounds like we’re all getting there. : )
I actually tried the ‘up the bid’ method on this problem - and still screwed it up - but I realize now that it would have worked just fine.
The up the bid down the ask thing never works for me cause I’ve tried to remember it and I remember it as the CFAI is always giving me the up the ask treatment.
all i remember from currency trades was the hottie from the schweser video was talking about… “up the bid, down the ask”… I can’t remember what she meant though…anyone care to guess?
Scroll up 6 posts.
forget it…i see the answer above!!
Hi, I am doing it bit differently but getting the correct ans. Might help someone who has not yet mastered this concept. Buy1/Buy2----------------Rate 1--------------Rate 2 ------------------------------Bid Price----------Ask Price Euro/US$------------------1.0000------------1.0015 British Pound/US$--------2.0000------------2.0100 if I have and want to buy Euro(buy1) rate 1 will apply(1.0000) If I have pound and want to buy (buy2) rate 2 apply (2.0100).
i got d as well, but why didn’t they put a spread on the gbp/euro? just the way the question was asked?
pencil2000 Wrote: ------------------------------------------------------- > all i remember from currency trades was the hottie > from the schweser video was talking about… > > “up the bid, down the ask”… > > I can’t remember what she meant though…anyone > care to guess? Up the bid, means you can use it to convert denominator currency to numerator currency. Down the ask, means that you can convert numerator to denominator currency. I used to used different method. But I like this way better.
I absolutely love tri-abitrage. It is the worst taught subject in the whole ciriculum. All this drawing line/up the bid/down the ask is confusing. All you need to do is multiply or divide by whatever number gives you the smallest number.