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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: gumnam who wrote (38249)	9/15/2003 2:17:22 PM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to 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

To: gumnam who wrote (38249)	9/17/2003 2:34:46 PM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 74559

Gumnam, the last 2 days is an example resembling the what I mentioned before. On Sept 16, around 6 AM GMT the EUR/USD was 1.1315 since it dropped to 1.1140 by 6 AM GMT Sept 17, or 1.6% within one hour. This morning the EUR/USD rose from 1.1140 to the present level of 1.1295. quotes.ino.com So we had a 3% move in less than 2 days at a time that option IV is around 10.8% There were no meaningful news only FX manipulation. How could a commercial player properly hedge himself whit such low volatility aside from gambling all the time is beyond me.