Strategic Rules on Speculation in the Foreign Exchange Market
Posted: 17 Feb 2000
The paper specifies the conditions for profitable speculation in the foreign exchange market with spot and forward contracts. It derives the unique strategic rules from the initial two-choice situations in a given environment. Finally, in a more complex structure involving covered arbitrage, speculative profits are computed with iterative plays.
JEL Classification: F31, G12
Suggested Citation: Suggested Citation