Currency - "We Buy, We Sell" What does this mean?

sho_me_da_money

Guys,

Forgive me for my ignorance but when I he shop says:

US Dollar

We Buy - 1.81
We Sell - 1.58

Cant you just buy say £2000 worth of dollars at 1.58 and then immediately sell them back at 1.81 hence an instant profit?

Where am I going wrong? Please explain.

Thanks,

kalaika

I'm afraid your maths are off.

If you buy £2,000 worth of Dollars at 1.58 then you'll get 2,000 x 1.58 = $3,160.
If you then sell them back immediately at 1.81 then you'll get back $3,160 / 1.81 = £1,745.86.
So you would make a loss of just over £254 by doing this (i.e. this is where the shop is making its profit).

sho_me_da_money

kalaika wrote: »

I'm afraid your maths are off.

If you buy £2,000 worth of Dollars at 1.58 then you'll get 2,000 x 1.58 = $3,160.
If you then sell them back immediately at 1.81 then you'll get back $3,160 / 1.81 = £1,745.86.
So you would make a loss of just over £254 by doing this (i.e. this is where the shop is making its profit).

Ahh. That explains it!

I wasnt considering the $ the second time around.