How to make a small profit with currency if you have regular access to the Euro and Slovak Crown?

February 24, 2007 1:24 PM

How to make a small profit with currency if you have regular access to the Euro and Slovak Crown?

I'm not really sure how to phrase this question, but i am regularly in germany and slovakia and the euro has much more value than the slovak koruna (1 euro is 34.44 koruna). How do i make a small profit when using these two currencies?
and also how can i follow the exchange rate to make profit?

posted by freddymetz to work & money (4 comments total)

There are two ways to make money trading curency, directional speculation and arbitrage.

Directional speculation is when you buy one currency in hopes that it will go up in value relative to the currency you sold. This is risky, even if you think you have inside information.

Arbitrage is when you simultaneously buy and sell a financial instrument such that you make a profit. If there are different places where you can buy and sell the various currencies, you may find that there is a difference in the exchange rates at the different locations. The largest spreads are often found in places where there are officialcurrency exchange limits and an active black market. However, engaging in black market currency trading is illegal and potentially dangerous.
posted by b1tr0t at 1:50 PM on February 24, 2007

Become a banker.
posted by ilsa at 2:30 PM on February 24, 2007

No small timers do this kind of work on the side. At least not successfully. Sorry.
posted by zpousman at 3:01 PM on February 24, 2007

You can make small (probably very small) profits by only exchanging your money when it's favorable. For example, if you trade 5 euro for 35 krona, you could wait to buy euros again until you could get 6 euro for 35 krona. Doing this with a lot of money is probably really risky and a bad idea, and probably also isn't the best way to make money investing.
posted by !Jim at 7:05 PM on February 24, 2007