- This topic has 5 replies, 2 voices, and was last updated 1 year ago by
.
- Posts
In your first Forex Risk Management video, you say that if we want to buy the first currency, then we choose the lower rate, and if we want to sell the first currency, then we choose the higher rate.
Can you please reframe this from the point of second currency? Like what rate would we choose if we want to buy/sell the second currency?It doesn’t need ‘reframing’ – why make things more complicated?
To buy the second currency we have to sell the first currency. If we are selling the second currency then we are buying the first currency.
Wait, does this statement work irrespective of the whatever the Contract Currency might be?
The term ‘contract currency’ is used when dealing in foreign exchange futures or options, which are dealt with in fixed size contracts. This is not what you were asking about in your initial question, and is explained in my lectures on futures and options.
However determining what rate to use for converting currency is always the same rule (regardless of how you choose to remember how to decide).
- The topic ‘FOREX RATES’ is closed to new replies.