How To Setup Implied Vol & Risk Reversal Charts In Xenith
Setting up implied Volume and Risk Reversal Charts in Xenith is actually quite simple to do, but doing it without the RIC codes can be a real hassle. Here we show you how...
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We have a quick question from Sakeem who asks if we can quickly do a walkthrough of how we create risk reversal charts in Xenith. Thanks for the question Sakeem, it’s actually very simple and easy to do, the only real hassle is knowing what the RIC codes are but that is also actually quite simple so let’s have a look at it.
So, apart from the risk reversals I’ll also show you how to setup up implied volatility charts as well because they really go hand in hand in terms of analysis. Now for those viewers that don’t know, we did a video a few sessions ago that explained exactly what implied volatility is and what risks reversals are so for those that want to catch up on that video just go to the Video Library inside terminal, open up the Q&A video section, and then in the search bar type in the words risk reversals, and the video should pop up, so if you don’t know what we mean when we talk about implied volatility or risk reversals just check out that video.
Right, so on to the charts. This is what a chart looks like after we have setup some implied volatility graphs, now you can play around with this to have one for each currency where you have both the implied volatility for various durations alongside the risk reversals or you can choose to have a chart where you have all the major currencies and then have their implied vols or risk reversals displayed, or you could setup a monitor for it but it’s not as useful as a chart in my opinion, at least when it comes to vols and risk reversals.
So, let’s go ahead and open up a new chart and I’ll show you how to set it up like I have mine. Now, the first thing that you need is the RIC code for each one that you want to use, and the great thing about Xenith is that once you have the RIC for one currency it is VERY easy to just copy that for other currencies by swopping out the currency code.
For example, if I go back to that monitor, what you’ll see here from top to bottom is the implied volatility for each of the majors versus the Dollar, and they are grouped in the different durations, such as overnight implied vol, 1-week implied vol, 1-month implied vols etc. And you can see for each of these you only really need to know what that last part of the RIC is and then you just swop out the currency code.
For example, the 1-month implied volatility for the GBPUSD, the RIC code for that is GBP1MO=, so if you want to see the one for the EURUSD you just swop out GBP for EUR and then you have the RIC, so very simple and easy. So, for overnight implied vol the last part you need is just ONO= and then you just add the currency code in front of that, and for the 3-month you just need to know the last part which is 3MO= and then just add the currency code in front of that.
For the risk reversals the code looks slightly different but also very simple as well. For the risk reversals you just once again need the last part of the RIC and then you can replicate that for all of the majors. The bit you need for 1-month risk reversals is 1MRR=, and then you just again at the currency code in front of that, for example for the JPY the 1-month risk reversal’s RIC would be JPY1MRR=, and for the 3-month you just change the 1 to a 3, as simple as that.
So, then back to the chart. When you select what instrument you want to see, simply just add in your RIC, let’s say you want to replicate what I have done for the GBP, then the first one you want to add is the implied vol, so then just type in GBP1MO=. After that we’ll add in the 3-month one, which is GBP3MO=.
After that we’ll add another analysis and this time we’ll add the 1-month risk reversal, so just type in GBP1MRR=, and that’s it, and then you can do the same for the 3-month as well if you want.
So, very simple and very easy Sakeem, any other questions just let us know.
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There’s a link below were you can learn more about it
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----
We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
You understand the markets and trade with confidence. Learn more at our website here: https://financialsource.co
-----
We have a quick question from Sakeem who asks if we can quickly do a walkthrough of how we create risk reversal charts in Xenith. Thanks for the question Sakeem, it’s actually very simple and easy to do, the only real hassle is knowing what the RIC codes are but that is also actually quite simple so let’s have a look at it.
So, apart from the risk reversals I’ll also show you how to setup up implied volatility charts as well because they really go hand in hand in terms of analysis. Now for those viewers that don’t know, we did a video a few sessions ago that explained exactly what implied volatility is and what risks reversals are so for those that want to catch up on that video just go to the Video Library inside terminal, open up the Q&A video section, and then in the search bar type in the words risk reversals, and the video should pop up, so if you don’t know what we mean when we talk about implied volatility or risk reversals just check out that video.
Right, so on to the charts. This is what a chart looks like after we have setup some implied volatility graphs, now you can play around with this to have one for each currency where you have both the implied volatility for various durations alongside the risk reversals or you can choose to have a chart where you have all the major currencies and then have their implied vols or risk reversals displayed, or you could setup a monitor for it but it’s not as useful as a chart in my opinion, at least when it comes to vols and risk reversals.
So, let’s go ahead and open up a new chart and I’ll show you how to set it up like I have mine. Now, the first thing that you need is the RIC code for each one that you want to use, and the great thing about Xenith is that once you have the RIC for one currency it is VERY easy to just copy that for other currencies by swopping out the currency code.
For example, if I go back to that monitor, what you’ll see here from top to bottom is the implied volatility for each of the majors versus the Dollar, and they are grouped in the different durations, such as overnight implied vol, 1-week implied vol, 1-month implied vols etc. And you can see for each of these you only really need to know what that last part of the RIC is and then you just swop out the currency code.
For example, the 1-month implied volatility for the GBPUSD, the RIC code for that is GBP1MO=, so if you want to see the one for the EURUSD you just swop out GBP for EUR and then you have the RIC, so very simple and easy. So, for overnight implied vol the last part you need is just ONO= and then you just add the currency code in front of that, and for the 3-month you just need to know the last part which is 3MO= and then just add the currency code in front of that.
For the risk reversals the code looks slightly different but also very simple as well. For the risk reversals you just once again need the last part of the RIC and then you can replicate that for all of the majors. The bit you need for 1-month risk reversals is 1MRR=, and then you just again at the currency code in front of that, for example for the JPY the 1-month risk reversal’s RIC would be JPY1MRR=, and for the 3-month you just change the 1 to a 3, as simple as that.
So, then back to the chart. When you select what instrument you want to see, simply just add in your RIC, let’s say you want to replicate what I have done for the GBP, then the first one you want to add is the implied vol, so then just type in GBP1MO=. After that we’ll add in the 3-month one, which is GBP3MO=.
After that we’ll add another analysis and this time we’ll add the 1-month risk reversal, so just type in GBP1MRR=, and that’s it, and then you can do the same for the 3-month as well if you want.
So, very simple and very easy Sakeem, any other questions just let us know.
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If you find this content helpful, you’ll love Financial Source.
There’s a link below were you can learn more about it
https://financialsource.co
