Relative Series

Course Name: Short Selling in Trading, Section No: 3, Unit No: 7, Unit type: Video, My question is in the example given, If I am a trader in the USA who trades Bank of America in US$ why do I need the exchange rate of USDGBP in my calculations ?  I am missng the point of using USDGBP in the example given if I trade in the USA

Hi Aliko,



Yes you are correct, if you are trading from the USA you don't need the exchange rate of USD/GBP as you will not be exposed to foreign exchange risk.



Thanks,

Rushda Ansari