Exotic Cross Pair Price Calculation Mystery
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Thread: Exotic Cross Pair Price Calculation Mystery

  1. #1
    Greetings,

    Could anybody explain how the market price for its exotic cross pairs, like the GBPCHF, is calculated...?

    Thanks

  2. #2
    1 Attachment(s) Thanks Scott for the reply. I translate your response as an answer to 'how pip values are calculated for various cross pairs' I'm interested in how the actual market price of an exotic is calculated. For example:

    Tonight we've got a snapshot of these prices:
    USDCHF 1.1329 / 1.1335
    EURUSD 1.4732 / 1.4736

    I would like to know how the market makers justify their price for the EURCHF of 1.6683 / 1.6688

    I'm mentioning bid/ask only for information. The spread is not of any concern.

    Thanks,
    Phil

  3. #3
    Sorry scott, did not see your last line for multipliion.

    Alles Klar

    Thank

  4. #4
    Quote Originally Posted by ;
    Thank You Scott for the reply. I interpret your response as a response to 'how pip values have been calculated for various cross pairs' I'm interested in how the actual market price of an exotic is calculated. For instance: Tonight we have a snapshot of the following prices: USDCHF 1.1329 / 1.1335 EURUSD 1.4732 / 1.4736 I would like to know how the market manufacturers justify their price for your EURCHF of 1.6683 / 1.6688 I'm mentioning bid/ask only for information. The spread is not of any issue. Thanks, Phil image
    click right button , show spread .OK

  5. #5
    You might wish to consider using an indior. . .it reveals on the screen the spread.

  6. #6
    Quote Originally Posted by ;
    Greetings,

    Could anyone explain how the market price for the exotic cross pairs, like the GBPCHF, is calculated...?

    Due
    This is the way it is performed:

    A pip is figured by dividing the smallest increment for a given currency by the current exchange rate.
    Employing the GBPJPY as an example you would get: 0.01/ /233.18 = 0.0000428
    This is expressed concerning the base currency which in this situation is the GBP. To convert into US Dollars you have to multiply by the GBPUSD exchange rate that is currently 1.9592.
    0.0000428 x 1.9592 = 0.0000838
    To convert this into a typical lot you multiply by $100,000
    0.0000838 x100,000 = 8.38
    As a general rule many pairs not ending in USD are around 8 pips and all pairs ending in USD are 10 pips. The only major exception to this is that the EURGBP. This rule of thumb applies to the majors.

    The practice is exactly the exact same for any pair.

    I am sorry, did you need pip value of this currency pair price in dollars?

    If you want the market coping price, just multiply the USDCHF * GBPUSD

    1.1330 * 2.0460 = 2.3181

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