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Triangular Arbitrage Step-by-Step

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Uploaded by on Jun 3, 2011

Step-by-step understanding of the triangular arbitrage concept in currency markets

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Uploader Comments (collegefinance)

  • You want to make sure that the implied cross rate contains the currency in which you want to trade, in this example it's the yen.

  • The idea is to determine if there is a difference between the quoted cross-rate and the implied cross-rate. If so, we buy at the lower price and sell at the higher price and make arbitrage profit.

    If there is no difference between the quoted cross-rate and the implied cross-rate, we would be buying and selling at the same price so there would not be an arbitrage profit.

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  • how to you know which banks to use for the cross rate

  • Hi hi! Have you thought about the British Box Breakout (just google it)? Ive heard some great things about it and my cousin earned tons of money.

  • Thank you so much for this, I have been trying so long to understand it and you illustrated it in a manner that was easy to follow and understand

  • you lost me at 2 minutes

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