Surprisingly Unknown: An Introduction to "Click 365" | Episode 3: Arbitrage Strategies Using Click 365 [Yohei Onishi]

Profile of Yohei Onishi

Financial journalist. After working at a publishing company, he became independent in 1995 and has contributed articles mainly on finance and economics to money magazines, business magazines, and weekly magazines. He has interviewed many front-line traders and strategists, as well as top executives of listed companies. He is well-versed in FX and financial trading in general.

*This article is a reprint/edit of an article from FX College.com November 2018 issue. Please note that the market information in the main text may differ from current market conditions.

Make both buy and sell orders to hedge risk

There were probably many people who invested in high-interest currencies like the Turkish lira for swap points, and the recent collapse of the Turkish lira must have been a heavy blow. Emerging-market high-interest currencies are inherently volatile, so when aiming for swaps, it is prudent to implement thorough risk hedging.

A concrete strategy is to establish a hedged position by simultaneously selling and buying (a double-sided position). This allows you to pursue an arbitrage (saya-tori) strategy against swap points while mitigating price fluctuation risk. In the case of the Turkish lira, one idea is to use "Click 365" when building a long position.

Arbitrage is a method that seeks profit from the price difference between two investment targets, with classic examples focusing on gaps between spot and futures trading. By placing both buy and sell positions at the same time, you can aim for steady profits while minimizing risk, which is why hedge funds often employ this approach.