I'm getting my FX rate information from a provider that only provides me one direction THB => CHF.

Now I want to calculate the inverse: CHF => THB.

I see two possibilities:

  1. Take the middle of the rate THB => CHF and compute the inverse
  2. Go over the USD: CHF => USD => THB

What is the correct way? Consider two scenarios:

  1. I only want the middle of the rate
  2. I want the bid and ask
  • $\begingroup$ Downvoters, please give me a reason why. $\endgroup$ – Roland Feb 27 '17 at 8:15
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    $\begingroup$ What do you want, the FX Rate or the price of an exotic option involving the FX rate of CHF-THB¿ $\endgroup$ – arodrisa Feb 27 '17 at 8:55
  • $\begingroup$ @arodrisa I want the FX Rate $\endgroup$ – Roland Feb 27 '17 at 9:18
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    $\begingroup$ I voted to close as basic financial questions are off-topic for this site (I did not downvote though). $\endgroup$ – Chris Taylor Feb 28 '17 at 10:47
  • $\begingroup$ If you have the bid and the ask, then you just take the inverse of both and then switch the two numbers. $[a,b] \rightarrow [1/b,1/a]$ $\endgroup$ – Alex C Feb 28 '17 at 23:46

What you want is option 1 (simplier). In the other case you will loose money because of spreads


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