Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Haim R. Branisteanu who wrote (38189)	9/14/2003 10:55:38 AM
From: gumnam	Read Replies (1) of 74559

Hi HRB, Currency returns are a lot smaller than the comparable returns in QQQ or other stocks especially in the face of apparent volatility. But the vols in currencies are much much lower and the ranges are much tighter. So by necessity to make any big money you have to use leverage. I will just illustrate using Eur and NEM Eur has moved between 1.05 to 1.19 almost 14% in the whole year. NEM on the other hand has moved from 25 to 40, almost 60%. Even though day to day it almost seems that they are as volatile, the ranges indicate that a lot of Euro moves are just noise. Also the 1 month implied vols in Eur have never crossed 15% this year, and these days are at 11% levels. NEM on the other hand is 34%. Currencies are just not that risky, and to make serious money in currencies, you have to use leverage. The easiest way is to open up a commodities trading account at some broker and use futures. Cheers Gumnam

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