Calendar spread usdinr

Trading
1

So today I bought 250 lots of apr fut of usdinr scrip at avg price of 65.1440 and sold equal qty at 65.3965 in may fut contract everything was normal but at the very last minute if you look at the charts apr contract came down to 65.13 and may contract went up to 65.4125 resulting in about 7.5k loss (I haven’t closed the positions yet).

What should I do next?

  1. Should I wait till apr month expiry?
  2. Should book considerable amount of profit in long position and hope the price will come down in may fut? Or vice versa?
  3. Will the difference in future prices will get smaller with respect to time or greater?
2

@newguy

May i know why are you bullish on usdinr? because dollar index is in long term downtrend.

if you can answer that question correctly , you will get answers to those 3 questions.

3

I am not bullish or bearish I am just trying to implement calendar spread.

1 Like
4

@newguy

ok so arbitrage then?.

if that is the case , your strategy will tell you when to exit.

5

Could you tell apart from dollar index what cues I should look for to trade usdinr pair?

6

@newguy

you did not answer , if you trading usdinr directionally or arbitrage?

i cannot answer that question unless you are specific about what strategy you are using.

for direction , you have to look at fundamentals of both countries india and US.

if you doing arbitrage, then quantitative analysis.

7

Currencies respond to developing macro narrative and central banks’ view very quickly. Currency trading purely on technicals may not work.

8

Hey…any tips on how we can use arbitrage in currency? I know a bit on how to do it in stock options but never done it in currency.

9

Arbitrage for FX is not possible as there’s no concept of trading ‘spot’

1 Like
10

@Simple_Trader

Don’t bother with arbitrage. retail can never find the arbitrage opportunities. Institutions will close the gap very quickly.

Stick to directional approach.

1 Like
11

This comment didn’t age well. The guy would have made 4000 * 2.5 * 250 = 25 lakhs in 2 years on an investment of around 5 lakh on 250 lots.

4000 = (0.0025) 1 * 4 * 100 * 10 (no of pips in Rs 10 move)

12

Thanks Joe!

13

Sure…thanks!