# Tag Info

Accepted

### If the volatility of pounds/euros = .2 do we know anything about the volatility of euros/pounds?

The trick here is that you're not asking about $\mathrm{Var}\left(\frac1X\right)$. Imagine one currency is a stock $S$ and the other a stock $Q$. Then the volatility of the exchange is the square root ...
• 333

### Is trading mean reversion of small principal components of prices profitable?

Within the fixed income space, there's a lot of literature on PCA trading. The first 2-3 principal component factors (PCs) can typically explain 90-99% of the total variances in yield curve movement....
• 10.9k
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### CNY Devaluation: Why EUR up, USD down?

Today (1 day after the fact) the following headline appeared in the Financial Times: "September Fed rate lift-off put in doubt, Fallout from China’s currency move turns market mood". If true, this ...
• 9,617
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### Group name for currencies, equities and other financial products

The most universal name that any "currency (pair)", "equities" or "futures" falls under is either a product or an instrument. In some ways I prefer product because you can have 2 exchanges allowing ...
• 5,062

### Relation between ATM, RR and BF

The ATM is an outright position (long 50 delta put and 50 delta call) so the main exposure is vega. It is the riskiest of the three, and demands a higher bid-offer spread from market makers to ...
• 5,628
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### Why is there onshore and offshore currency?

Certain regulations in a country might inhibit the values of a unit of currency from being the same within the borders of the country and outside. There might be foreign exchange or banking ...
• 211

### Why is there onshore and offshore currency?

It's because of onshore capital controls; units of currency cannot freely enter and leave the country and so currency held onshore (within the domain of the capital controls) is not fungible with ...
• 1,122

### CDS currency and reference obligation currency

A reference entity (the debtor that might have a credit event) does not have any currency denomination. A reference entity might have many outstanding debt instruments. Each instrument is denominated ...
• 9,743

### Currency devaluation and banks' solvency

Simply put, Russian banks (and other institutions) had local assets and hard-currency liabilities. Local assets lost value not only because they were denominated in a currency that unexpectedly ...
• 9,743
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### What is meant by "position at a given time" in the context of a series of forex trades?

Position here is the residual amount of one or other currency at the end: You gave us: ...
• 3,609

### Why is Indian rupee is stable against the USD even though most other currencies weakening?

To answer this question, lets dive into some of the factors that generally determine foreign exchange rates. I've outlined the two of the most widely discussed factors below. Current account balance ...
• 129
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• 614

### What determined the weights of a currency in the International Monetary Fund SDR basket(2015)?

It's a unit of account (for the IMF and other international bodies') purposes. As well as just a basket of the most liquid and transferable currencies that reserve managers will all hold anyway in ...
• 4,936