# Tag Info

I have never seen this particular formula either but I have seen something similar being used frequently. Hedge costs are computed as $$(Fwd\ Pts/Spot)/100$$ and annualized (usually with exact days though, like ACT/360 or ACT/365). E.g. if fwd pts = 50 spot = 110 days = 91 (for 3m and daycount subject to convention ) $$(50/110)/100 = 0.45455 \%$$ 0....