USD v EUR

Samba

Anyone holding off cashing out until the Dollar increases in value (if).... Just wondering if i should bite the bullet on a large withdrawal...its getting really bad by the day.

El Stuntman

Samba wrote:

Anyone holding off cashing out until the Dollar increases in value (if).... Just wondering if i should bite the bullet on a large withdrawal...its getting really bad by the day.

like I have been saying to everyone who has asked this question over the last 18 months...hold only the absolute minimum you need in USD and the rest in EUR

the USD is long-term sick and there is no panacea

FYI, I only got 1.44 on a Neteller cashout this morning :eek:

on the plus side, Vegas looks ever more tempting

ollyk1

El Stuntman wrote:

like I have been saying to everyone who has asked this question over the last 18 months...hold only the absolute minimum you need in USD and the rest in EUR

the USD is long-term sick and there is no panacea

FYI, I only got 1.44 on a Neteller cashout this morning :eek:

WOW! Nice few quid for Neteller there.

Holding a significant unintentional foreign currency exposure is just really bad business. You wouldn't do it if you were an investor in stock or buying a property abroad so why do it because you are investing in poker. Spreadbet hedging ftw.

Samba

Yeah, things don't look good, well i bit the bullet.....

It's actually paid dividend in the past it usually makes a brief bounce after a plunge.... as soon as the funds land on my account the dollar will probably rally

But yes, sound Advic...going to be keeping skeleton rolls online from now on...

The worst part is i probably lost the guts of a 1-2k on the exchange due to the poker room holding up my withdrawal for almost two weeks, could do nothing but watch my funds decrease in value as the days went by.

I got the funds by the time it was at a year low.

McWager

without reference to the dollar, why do you think holding a foreign currency is necessarily a bad thing? I mean if we were Americans we would have all our money in dollars. Is it not in one way diversifying your risk?

I was so sick of paying transaction charges online and to get dollars to travel to foreign tourneys that I recently opened a USD account - obviously in hindsight that decision not working out so well for me......

RoundTower

if you often need dollars "to travel to foreign tourneys" or for other reasons then holding dollars diversifies your risk. If all the money you spend is in euros then hedging is -EV but decreases your variance so this is a good thing if you are a nit or have cashflow problems.

Trampas

If you have a PP you can have your account in euros.

Makes it easier for cashing out as your account is always in EUR's and you convert to $ everytime you sit down.

So you don't suffer for the exchange rate you sit down. Only means you bring less to the table each time

ollyk1

McWager wrote:

without reference to the dollar, why do you think holding a foreign currency is necessarily a bad thing? I mean if we were Americans we would have all our money in dollars. Is it not in one way diversifying your risk?

I was so sick of paying transaction charges online and to get dollars to travel to foreign tourneys that I recently opened a USD account - obviously in hindsight that decision not working out so well for me......

Not trying to be smart here but just to mention the following in brief.


Carrying additional risks isn't diversifying risks. Investing in a number of uncorrelated investment opportunities is diversifying risk. There is a huge difference. If this is unclear just say so.


Investing in an industry in which you hope to make profit and then carrying an additional unrewarded risk (the value of the dollar can go up as well as down) is simply adding to the risks of receiving that return without any corresponding addition to the expected reward. Therefore your expected risk adjusted return has reduced.

RT has correctly pointed out that hedging is long run -EV and that is why long run investors will generally run unhedged portfolios as they don't expect to be encashing their assets any time soon (they may take tactical decisions re currency but that is an informed and actively taken choice not a passively acquired exposure) and therefore don't care about short run variations in exchange rates.

Poker players could take a similar view about their poker bankrolls depending on their life roll but then they shouldn't/wouldn't be complaining about prevailing market conditions if/when they cash out as they'd have at least taken a decision in this respect and would be big enough boys and girls to live with the consequences of that decision I would hope (this seems to be the case for yourself and RT but not the OP).

If it's a hefty and unrewarded risk in the context of your life roll and you don't have the luxury of being able to take a longer term view (i.e. you cash out on a regular basis) then you should try to hedge your exposure as cheaply as possible. Hence my original post.

If you are RT and you take a long term view and you have dollar needs then you take the rough with the smooth.

Man I had intended for this to be a short post honest. :eek:

El Stuntman

ollyk1 wrote:

your life roll

lol, could anyone bar a poker player ever write those words? it's very worrying when you find yourself using poker phraseology in real life situations, even more so to the 'civilians'....

McWager

ollyk1 wrote:

Not trying to be smart here but just to mention the following in brief.


Carrying additional risks isn't diversifying risks. Investing in a number of uncorrelated investment opportunities is diversifying risk. There is a huge difference. If this is unclear just say so.


Investing in an industry in which you hope to make profit and then carrying an additional unrewarded risk (the value of the dollar can go up as well as down) is simply adding to the risks of receiving that return without any corresponding addition to the expected reward. Therefore your expected risk adjusted return has reduced.

RT has correctly pointed out that hedging is long run -EV and that is why long run investors will generally run unhedged portfolios as they don't expect to be encashing their assets any time soon (they may take tactical decisions re currency but that is an informed and actively taken choice not a passively acquired exposure) and therefore don't care about short run variations in exchange rates.

Poker players could take a similar view about their poker bankrolls depending on their life roll but then they shouldn't/wouldn't be complaining about prevailing market conditions if/when they cash out as they'd have at least taken a decision in this respect and would be big enough boys and girls to live with the consequences of that decision I would hope (this seems to be the case for yourself and RT but not the OP).

If it's a hefty and unrewarded risk in the context of your life roll and you don't have the luxury of being able to take a longer term view (i.e. you cash out on a regular basis) then you should try to hedge your exposure as cheaply as possible. Hence my original post.

If you are RT and you take a long term view and you have dollar needs then you take the rough with the smooth.

Man I had intended for this to be a short post honest. :eek:

Ok - So my thinking was:
anything I purchase in the future is as likely to be in dollars as in Euros, this includes capital assets such as houses etc. In this case, if I have half of all my cash in Euros and the other half in dollars, and both currencies are equally likely to go to sh*t, then I not affecting my overall risk, but cutting down on some transaction charges?

But what your saying is:
no one should hold more than one currency as you are then taking on the risks of both currencies - get all your cash back into one currency as soon as possible

is this right?

ollyk1

McWager wrote:

Ok - So my thinking was:
anything I purchase in the future is as likely to be in dollars as in Euros, this includes capital assets such as houses etc. In this case, if I have half of all my cash in Euros and the other half in dollars, and both currencies are equally likely to go to sh*t, then I not affecting my overall risk, but cutting down on some transaction charges?

But what your saying is:
no one should hold more than one currency as you are then taking on the risks of both currencies - get all your cash back into one currency as soon as possible

is this right?

You didn't say half your expected expenditure would be on dollars in the future. Obviously the least risk position for your particular circumstances is to have your assets equally split between dollars and euros. Any other split would then carry an unnecessary risk in your personal circumstances is what I'm saying.

I was answering the OPs question (a 100% Euro spending poker player with an unwarranted dollar exposure) and you seem to be discussing your own position.

McWager

ollyk1 wrote:

I was answering the OPs question (a 100% Euro spending poker player with an unwarranted dollar exposure) and you seem to be discussing your own position.

Yip didnt know what OPs position was and since it affects me also and been thinking bout it a lot lately just thought Id ask- cheers for the response anyway

ollyk1

McWager wrote:

Yip didnt know what OPs position was and since it affects me also and been thinking bout it a lot lately just thought Id ask- cheers for the response anyway

No bother at all.

RoundTower

ollyk1 wrote:

If it's a hefty and unrewarded risk in the context of your life roll and you don't have the luxury of being able to take a longer term view (i.e. you cash out on a regular basis) then you should try to hedge your exposure as cheaply as possible. Hence my original post.

Good post olly but I think there is a bit of a contradiction here. If you cash out on a regular basis that usually means you do not have much money locked up online at any one time so you are not risking much depreciation. The people most affected by currency fluctuations are those who keep large bankrolls online and rarely cash it out.

dvdfan

Hi sorry for the ingorance but i just dont follow this kind of stuff so i was wondering if someone could tell me if my setup is bad?

I have a $$ account with Noble Poker
I cash out somewhere between $500-$1k a week to my Moneybookers account
My Moneybookers account is in €€€
I then transfer some of that money to my AIB account or my MBNA credit Card both of which are in €€€

Is there a better way to do this, im thinking of moving to another poker skin to take advantage of a bonus so i guess setting up the account in €€€ would be better or is the amount of money involved not worth bothering about. I have a $3.5k bankroll if that makes any difference????

hotspur

Somewhat tangential but does anyone here happen to know if you can open a US bank account from abroad without any residing address in the US or current US social security number?

I ask cause I'll be getting an immigration visa to work there soon and thought that it might be easier to drop 50k into an American bank account rather than the hassle of documenting the various ways us folk ten to have money squirreled away. "Hello mr immigration official, money? Yes have you heard of Neteller!!!...hello officier...hello prison guard...um, hello bubba".

Samba

ollyk1 wrote:

Poker players could take a similar view about their poker bankrolls depending on their life roll but then they shouldn't/wouldn't be complaining about prevailing market conditions if/when they cash out as they'd have at least taken a decision in this respect and would be big enough boys and girls to live with the consequences of that decision I would hope (this seems to be the case for yourself and RT but not the OP).

LOL god that made me laugh.

Normally olly i would simply accept market conditions however in light of recent market trends with the ever weakening dollar this is cause for concern.

Thanks for your reply, very helpful, i'll be cashing out on a weekly basis rather than monthly to reduce exposure

RoundTower

hotspur wrote:

Somewhat tangential but does anyone here happen to know if you can open a US bank account from abroad without any residing address in the US or current US social security number?

in general, no. If you have enough money you might be able to find a way.

ollyk1

RoundTower wrote:

Good post olly but I think there is a bit of a contradiction here. If you cash out on a regular basis that usually means you do not have much money locked up online at any one time so you are not risking much depreciation. The people most affected by currency fluctuations are those who keep large bankrolls online and rarely cash it out.

I dunno Dave there seems to be a middle ground player who isn't comfortable with the level of exposure and isn't prepared to wait it out. It's the guys in the middle who feel the squeeze I guess.

For example

Samba wrote:

Normally olly i would simply accept market conditions however in light of recent market trends with the ever weakening dollar this is cause for concern.

I'm just suggesting options Samba. If its affecting you that much then you need to do something. One option is obviously to keep cashing out and reloading (which has a transaction cost as evidenced by El S's netteller experience) or else insure the exposure using a spreadbet.

ollyk1

Samba wrote:

Thanks for your reply, very helpful, i'll be cashing out on a weekly basis rather than monthly to reduce exposure

That will probably do it for you too!:p

Glowingmind

Don't cash out, just play higher

McWager

hotspur wrote:

Somewhat tangential but does anyone here happen to know if you can open a US bank account from abroad without any residing address in the US or current US social security number?

I ask cause I'll be getting an immigration visa to work there soon and thought that it might be easier to drop 50k into an American bank account rather than the hassle of documenting the various ways us folk ten to have money squirreled away. "Hello mr immigration official, money? Yes have you heard of Neteller!!!...hello officier...hello prison guard...um, hello bubba".

Citibank have a branch in Oxford Street London and will allow an Irish resident to open an account over the internet. As long as you keep a minimum balance which is only something like a few k there is no charge for maintaining a/c

They give you an ATM card which you can use in the US charge free. Cheques also clear through NY which apparently makes it quicker.

Ive set one up- they were v helpful and it was all very quick and painless.

HiCloy

Don't say I didn't warn ye

Another record high today ($1.413)

Samba

ollyk1 wrote:

I'm just suggesting options Samba. If its affecting you that much then you need to do something. One option is obviously to keep cashing out and reloading (which has a transaction cost as evidenced by El S's netteller experience) or else insure the exposure using a spreadbet.

Normally i would cash out on a monthly basis, it's not that it's affecting me in any major way, however when the dollar reaches an all time low it does raise an eyebrow. Especially when you see the difference with market trends over the past few months.

I was merely wondering if long term exposure was worth the risk, this I can afford no problem, my worries lie not with the exposure but the current market trends and their recent volatility.

Spread betting you say, too much variance especially when traders falsely shout across the floor that a bomb has gone off in a Paris metro....that was costly.

Thanks for some of your comments and suggestions

dvdfan

dvdfan wrote:

Hi sorry for the ingorance but i just dont follow this kind of stuff so i was wondering if someone could tell me if my setup is bad?

I have a $$ account with Noble Poker
I cash out somewhere between $500-$1k a week to my Moneybookers account
My Moneybookers account is in €€€
I then transfer some of that money to my AIB account or my MBNA credit Card both of which are in €€€

Is there a better way to do this, im thinking of moving to another poker skin to take advantage of a bonus so i guess setting up the account in €€€ would be better or is the amount of money involved not worth bothering about. I have a $3.5k bankroll if that makes any difference????

Anybody ^^^^^^

hotspur

McWager wrote:

Citibank have a branch in Oxford Street London .

Thanks.

Also since we all play on dollar currency tables but many of us are on sites with which we actually have euro accounts then we are playing relatively smaller than before. Thanks to the depreciating dollar some people might actually get to move up limits without improving.
I for one am adding 1 bb to my preflop raises to correct for the falling dollar

HiCloy

dvdfan wrote:

Anybody ^^^^^^

It seems ok but check what sorta charges there are and exchange rates you're paying, especially if you put money in and out of €/$ (say putting money from moneybookers back to the site if you run bad for a day or 2) and the difference between what you get for dollars and what you pay for dollars is significant

Setting the account up in € only matters if you want to leave a decent roll in it, but if you have the choice you may as well

dvdfan

HiCloy wrote:

It seems ok but check what sorta charges there are and exchange rates you're paying, especially if you put money in and out of €/$ (say putting money from moneybookers back to the site if you run bad for a day or 2) and the difference between what you get for dollars and what you pay for dollars is significant

Setting the account up in € only matters if you want to leave a decent roll in it, but if you have the choice you may as well

Cheers Hicloy, i have a sufficent bankroll so there will be no need to transfer money in and i checked my last withdrawal and they paid me the rate of 1.42 on the 21st, not too sure what it was trading at then but its trading at 1.40 now so it seems pretty ok and moneybookers only charge $1.80 per transaction when transferring to my bank account or credit card so ill hang tight for the moment.

The Tourist

There is some confusion in this thread.

McWager wrote:

Is [holding dollars] not in one way diversifying your risk?

No, as ollyk1 says, you are using the same money to make two bets. An example of divirsifying your risk is using half your money for poker bets and the other half for property investments.

RoundTower wrote:

hedging is -EV but decreases your variance so this is a good thing if you are a nit or have cashflow problems.

It is not true to say that hedging in this case is always -EV off the bat. In fact hedging is a bad word to use here. If you have a future cashflow in dollars and want to lock in the current eurodollar rate then you must do a currency trade. NB: This is in itself a bet. This point seems to have been lost in this thread. After you lock in the rate , it can move up or down, and so your decision can have a positive or negative effect (vs what you would have cashed out had you not locked in the rate). On the other hand you know in advance what rate you will get. Not locking in the rate is also a (different) bet. There is no way around this. Currency rates are difficult to predict. The current trend may continue or stop or reverse. This is a call you will have to make yourself. Note also that everyones situation is slightly different (eg what they want to do with their money) so there is no "one fits all" solution here.

McWager wrote:

I was so sick of paying transaction charges online

This is a very important point. For the "individual investor" (ie you and me) transaction charges are very high. Constant moving between currencies doesn't strike me as a good idea. One other key point is that (in my case anyway) my dollars are on poker sites and these sites don't pay interest on my deposits. My bankroll is small so I don't much care, but more serious players might want to consider this point. Changing into euro means I can earn interest but in my case it's not worth the hasstle, or the transaction charges.

ollyk1 wrote:

Investing in an industry in which you hope to make profit and then carrying an additional unrewarded risk (the value of the dollar can go up as well as down) is simply adding to the risks of receiving that return without any corresponding addition to the expected reward. Therefore your expected risk adjusted return has reduced.

The additional risk is not unrewarded. You can make a profit from the currency exposure. What effect this ultimately has on your expected risk adjusted return is not clear and depends on your views on both the currency expected return and the currency expected risk for example.

hotspur wrote:

Thanks.
I for one am adding 1 bb to my preflop raises to correct for the falling dollar

I like this plan the best .

RoundTower

The Tourist wrote:

It is not true to say that hedging in this case is always -EV off the bat. In fact hedging is a bad word to use here. If you have a future cashflow in dollars and want to lock in the current eurodollar rate then you must do a currency trade.

hmm this is EXACTLY what a hedge is.

The Tourist

RoundTower wrote:

hmm this is EXACTLY what a hedge is.

You're right of course, locking in the rate can be called a hedge. It was a bad choice of words by me, sorry for any confusion. I was just trying to make the point that there are two ways to look at the trade. Firstly, you can say, I don't care about fx moves, I just want to lock in todays rate so I know my euro cash flow. Alternatively, you can be saying, I have the view that this rate is going against me, so I am going to do the trade now. While they are both the same transaction, the second one is less of a hedge and more of a directional play. The hedge can be +EV or -EV, but you would only do a directional play if you thought it was +EV.