Almost certainly they are aware of the risks, and the use of these channels is definitely not in accordance with standard operating procedure. That is, to be used only if there is really no alternative available.
Russian bank Tinkoff now offering to exchange rubles for dollars at a rate of 171 rubles per dollar. It was 83 before the European/US announcement about targeting the Russian central bank. Currency market formally opens tomorrow. This is brutal.
and then apply that information on-the-fly to questions they won't know in advance
But that's the whole point of LC grinding: to claw your way through enough of these problems until, lo and behold... there ends up being an 80 percent chance that any given "medium" problem thrown at you -- is one that you have in fact seen and worked on, already.
I'm just guessing at the 80 percent figure. But it seems pretty clear from the cult of LC grinding that one of the goals of this strategy is not just to learn general techniques for solving these problems -- but to get a significantly high percentage of these problems under your belt already, or nearly so.
While also learning to deploy the just the right grunts and moans and pauses to make your interviewer think you're seeing the problem for the first time, of course.
There are no embargoes on currency futures in the US. So far as I know there aren’t any embargoes on delivering rubles as part of a futures cash settlement either. Getting those rubles may get difficult. But currency futures are dollar cash settled…
My understanding is that futures are simply a contract between two parties. Ruble futures don't necessarily have to interact with Russia or any Russian individual.
There is no embargo. At the moment, US has imposed sanctions directly on Putin and other top Russian leaders, and a small number of Russian banks have been cut off from Swift. You are free to buy and sell Russian currency and stock if you want.
There is no such thing as a “forex market”. You are trading directly with a counterparty in forex. Those contracts do sometimes stipulate circuit breakers.
> There is no such thing as a “forex market”. You are trading directly with a counterparty in forex.
That’s called a market. You probably mean a market maker, who may buy or sell a security at a market price without an available counter party. Any market can have a circuit breaker. But usually forex doesn’t because the whole point of the market is to provide a way to convert currencies when needed, compared to stock markets where the main goal is to efficiently allocate capital.
To be specific there is no exchange or benchmark price for forex. When you trade forex you are directly dealing with the provider of the other side of the price vs a matching engine provided by a disinterested third party.
There are multi-dealer platforms that abstract this but you are still directly covered by your contract with the partner counterparty.
Most direct api integrations and multi-dealer platforms implement circuit breakers but they aren’t regulated like equities or futures exchanges.
Compare that to the link which is a forex futures exchange which is subject to cftc regulations around circuit breakers.
Directly dealing with a counter party is called a market. A “market maker” is called so because they literally create a market by ensuring there is always is a counter party.
The vocabulary you are using is not the way it’s used typically.
Perhaps you have some point different to mine but I can’t discern it because to me you are speaking a different language.
The important thing to understand is that circuit breakers as used at nyse or cme or cboe or lse are only possible because you aren’t dealing directly with your counterparty. There is an intermediary.
So why should the 4-month future rate (30 percent) determine the spot more strongly than the 1-month rate (20 percent)? When the latter has 100x the volume?
New York and European markets have not yet opened for the week. The futures are roughly a reliable indicator of where the market will open, low volume or not.
