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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: gumnam who wrote (38249)9/15/2003 2:17:22 PM
From: Haim R. Branisteanu  Read Replies (1) of 74559
 
gumnam, what you write in theory is true but as an human being I also need to sleep and further the change in FX prices are so fast and sudden that there is not much you can do to adjust your hedging.

Best example is the month of August and May this year. Further there very little you can do at a time that CB's of certain countries enter the markets to stabilize their own currency (Japan as an example)

True in a gradual price change it is easy to take the appropriate action but not at a time that FX prices rise or fall 1 to 2% in a matter of few minutes or the currencies are run purposely to take out stops only to reverse after they accomplished that.

Therefore an 11% monthly IV is not sufficient to proper hedge ones position to DELTA neutral
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