I am interested in trading forex pairs and using options to hedge my live forex positions. Does anyone know where can I find a list of forex brokers that offer me the possibility of opening positions (just like any forex broker out there) but at the same time buying american-style options from them in order to hedge my open long or short positions (in conjunction with a stop-loss order or by itself)?

You can Google it or try out Forex4you – I have been trading with them as well

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I did my PGDBM (Finance) from ICFAI Hyderabad (Now a Deemed University). I have worked for 2.75 years into actuarial valuation and am now Asst. Manager (Corporate Finance) in a manufacturing MNC. In the long run I want to work with the in-house Treasury Dept. of an MNC, dealing with hedging forex exposures, managing LC/BGs, managing liquidity, etc. What might be an ideal further education?

Its good that you have some experience into corporate finance. Side by side register for CFA. which is a 3 level course. CFA is the only way out for you, its the ultimate stuff in this domain.

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Possibly, but very unlikely. They invest in other ways. They like any corporation need money for liquidity.

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Yes, they manage all sorts of foreign currency hedges.

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So…do you think it’s a good business if a website acts as a forex broker that matches orders between its customers? Something like an ECN or a DMA broker…but without offering the orders on some intranet of other banks, hedge funds – but just its own customers? Like…on the fictional website "exforex.com" someone wants to buy 100,000 eur with usd and another customer wants to sell 100,000 eur. The website makes money of the spread – which here can be just one pip fixed. Because there are no middlemen and middlemen of middlemen and middlemen of middlemen of middlemen…etc. I guess this could be a very profitable idea…but there’s one problem. In order for such orders to be matched, one will need say 100,000 customers or more. So if I start such website, I don’t see how I will get thousands of customers so that the orders are easily matched, or at least some serious % of them. Even big stock exchanges like ASX have problems with liquidity, let alone a new website. I guess if I had one million in my bank account it would be much easier, but I can start such website with as low as just $50-$70k of my own money which won’t be enough even for leverage. Would you use such a broker anyway?

10x and happy new year!

In my personal opinion it would be fairly difficult to coordinate and set up in the first place but it seems interesting. Not too sure if it’ll work though because how do you get the word out there and is it even plausible in the first place?

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It seems the things in investment are pretty easy. I can master them by reading books and newspapers and the internet of course. I read the CFA paper and they are common sense to me who have learnt 3 years accounting and economics in high school.
I know in setting the price of options you need statistics/math. But to become the next warren buffet i know i don;t need that.
So i can be a hedge fund group CEO and investment bank CEO/CFO without college degree???Is that possible?
Instead of wasting time in college to learn what i already mastered, why not just earn some money and invest it?

Don’t underestimate what you don’t know. All a college degree does is give you exposure to various concepts and techniques, basically providing you with tools, it’s up to the individual to make use of the tools. It certainly isn’t necessary to do well but it improves your chances tremendously if you approach the topics covered in college from the perspective of how can you apply them. You’ve already demonstrated that you don’t have that perspective in your assertion that statistics and math is only needed for pricing options.

The Black Scholes equation is an application of differential and integral calculus using the concept of a random walk to calculate probabilities of future stock prices. It certainly isn’t just limited to pricing options. It can be used for everything from sizing investment to portfolio money management. Pricing options is simply one demonstration of how those tools can be used.

True, for many, college is just wasted time in that they do not learn how to apply what has been presented to them. The same is true about high school and junior high. Indeed the calculus required to understand the Black Scholes equation was actually taught in high school level calculus but few people learned how to apply high school calculus till University or later. You say that you took 3 years of accounting and economics in high school, no doubt you learned numerous annuity, savings, discounted cash flow, future value, present value equations, would it surprise you to hear that all those equations are really just two equations that you learned in junior high? So why did you waste your time in high school? It’s because you hadn’t learned how to apply the two fundamental tools that you had already learned.

If you’ve truly have mastered investing then there’s no need for college but your very question demonstrates how little you have mastered.

College is no guarantee that you’ll learn what you’ll need but a failure to acknowledge how much you don’t know is a good indication that you don’t know what you’ll need.

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We are 2 partners looking to launch an Offshore Forex Fund for European and Latin American investors primarily.

We are would like to know how the structure needs to be set up since one of us is based in the US and the other in a European country.

So far we understand that the management company should be in an Island (Bahamas, Cayman…).
- Do we have to open an Advisor in the US and a Research in the European country, so we both can get paid by the main Management company?

- When opening an Advisor in the US, Do we have to be registered with the SEC?

Many thanks

1) In the US to trade FX, you (almost) need to have a company registered as a CTA or a CPO and have at least one registered person in the group. This essentially means that you send a small amount of money (<$1000 total) to the MFA. Then someone has to go pass the Series 3 exam. Passing the Series 3 exam should be very simple. You could get out of this step if you were just going to trade Interbank bank markets, never EFP, etc. but it’s just not smart.

2) The domicile of the "management company" is not so important, however if you want to do this I strongly urge 2 management companies of which you are both equal partners. One management company owns the intellectual property and the other is the GP in your fund and gets allocations from others investors. If you separate ownership of the intellectual property from the way you get paid, you get a structure that will save you endless hassle as you try to expand.

3) In the US at least, you don’t get taxed on the trading profits and management fees allocated to the GP of the offshore entity until you repatriate the money. There is no reason to have an entity in the US to get paid. You just do a distribution from the GP of your fund to each partner by wiring it into your bank accounts offshore (BTW – unless you are loaded with money for start-up expenses and care about the prestige, I think British Virgin Islands is the way to go – prestigious enough and lots less money for start-up than Cayman, Bermuda, etc.).

4) Eventually you will have to be registered with the SEC when you get enough money onboard if you have an Advisor in the US. There are exclusions for small funds. I personally believe that you should welcome SEC supervision because it is not too onerous, it’s actually helpful to think of all the things that the SEC requires (they care about policies and procedures and trading FX is simple if you do 20 things right but doing any one thing wrong enough can kill you so policies and procedures are things that should be near and dear to you anyway), and SEC compliance is good for investor confidence.

Good luck!

Edit: Disagree with spirit. I went through this myself and the problem is that the information you need is expensive and not worth the money. Digging it up on places like this is smart.

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I’m looking for a Forex broker who provide cent accounts with the following features:
1- hedging on same currency should be possible
2- Leverage is 1:400 or 1:500
3- Lot size can go up to 10,000
4- reputable in trading and withdrawal of funds

Thanks

try www.gomarketsaus.com, they’re very good

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I like hedging and I don’t want them to change my leverage. Any recommendations for NON NFA brokers?
Bianca and Jake. You are both obviously just website advertisements. Since I’m quite a capable trader and do not need to learn from your site I will not be clicking on your links. Bianca, the first thing you need to do is "get to grips" with the fact that people whom spam these websites are the cockroaches of the internet.

Hello George,
you can visit http://www.brokers4forex.com/, they have reviews on two very good online forex trading platforms non-NFA regulated.

One is a great forex trading broker that gives you 5$ to start trading without depositing, the other one is another good forex broker to start with.

Marketiva has fixed leverage (1:100), on Etoro you can change it, but Etoro doesn’t accept US customers.

Do not hesitate to contact me if you want to share some info on forex

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What is mean by hedging in forex trading. Plz explain. thanks

Most of the time when you hear this phrase it means that you are trying to reduce your risk in trading. It is something that everyone who plans to invest should know about. It is a technique that can protect your investments to some degree.

What Is It?

While hedging is a popular trading term, it is also one that seems a little mysterious. It is much like an insurance plan. When you hedge, you insure yourself in case a negative event may occur. This does not mean that when a negative event occurs you will come out of it completely unaffected. It only means that if you properly hedge yourself, you won’t experience a huge impact. Think of it like your auto insurance. You purchase it in case something bad happens. It does not prevent bad things from happening, but if they do, you are able to recover a lot better than if you were uninsured.

Anyone who is involved in trading can learn to hedge. From huge corporations to small individual investors, hedging is something that is widely practiced. The manner in which they do this involves using market instruments to offset the risk of any negative movement in price. The easiest way to do this is to hedge an investment with another investment. For example, the way most people would deal with this is to invest in two different things with negative correlations.

This is still costly to some people; however, the protection you get from doing this is well worth the cost most of the time. When you begin learning more about hedging, you start to understand why not many people completely know what it is all about. The techniques used to hedge are done by using derivatives. These are complicated instruments of finance and most often only used by seasoned investors.

Is There A Downside To Hedging?

When you decide to hedge, you must remember that it comes with a cost. You should always be sure that the benefits you get from a hedge should be more than enough to make it worth your while. You should make sure the expense is justified. If it is not, then you should not hedge. The goal of hedging is not to make money. You will not make large gains by hedging yourself. You have to take some risks in order to gain. Hedging is intended to be used to protect your losses.

The loss cannot be avoided, but the hedge can offer a little comfort. However, even if nothing negative happens, you will still have to pay for the hedge. Unlike insurance, you are never compensated for your hedge. Things can go wrong with hedging and it may not always protect you as you think it will.

Should I Hedge?

Keep in mind that most investors never hedge in their entire trading careers. Short-term fluctuation is something that the majority of investors do not worry with. Therefore, hedging can be pointless. Even if you choose not to hedge however, learning about the technique is a great way to understand the market a bit more. You will see large corporations and other large traders use this and may be confused at why they are acting this way. When you know more about hedging you can fully understand their strategies.

Whether you decide to use hedging to your advantage or not, you will benefit from learning more about it. You can use it like an insurance policy when trading. You should remember however that hedging can be costly. Always check to make sure the costs of hedging will not run against any profits you may or may not make. Be sure those costs are realistic and that your need for hedging is realistic as well. You will be able to use hedging to help cut your potential losses, however hedging will never guard against the negatives altogether. Learning about it will give you a better understanding at how large traders work the system however, which can in turn make you a better player in the trading game.

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