Arbitrage Hedging and Speculation

Explains arbitrage hedging and speculation from the standpoint of a participant in the foreign exchange marketwhether an individual trader or an institutional traderwho possesses analytical skill economically sound judgment and who has access to market data. In the foreign exchange market arbitrage involves the simultaneous purchase and sale of a currency in different markets; the profit comes from the difference in the buying and selling prices. Hedging and speculation are opposing strategies for dealing with risk; hedging is a cover and speculation is an assumption of risk. Authors also discuss futures swaps forward contracts and other strategies. For financial scholars students analysts and currency traders.