Assessing the Cost of Trading a Cross

Our latest research article attempts to answer one of FX’s long standing questions – is it better to trade the cross directly, or is it better to trade through the legs?

Analysing this problem empirically we find both intuitive and interesting results. For example, on average, we find that it is generally better to trade EURSEK rather than the USD legs, as many would assume. We also find that for some crosses, it can be more optimal from a pure cost perspective at least, that trading the cross (e.g. AUDJPY) can be better than trading the USD legs.

If you are a BestX user and would like a copy of the research article please contact us at support@bestx.co.uk.