-
Creator
Johnsons David -
Released
October 3, 2011 -
Phrase count
338
Foreign exchange (Forex) is the largest market in the world based on trade value. Anyone can participate, including individuals, companies, and nations. Forex traders can engage in both futures and spot trading. Here’s a brief overview of both:
Forex futures began in 1972 at the Chicago Mercantile Exchange and have two main uses: they help manage exchange rate risks for international transactions and allow investors to profit from exchange rate fluctuations.
In futures trading, the price is fixed at contract signing, with actual currency exchange happening later (typically within three months). Most traders close their positions before the settlement date.
In the spot market, prices are determined at the time of trade, and currency exchanges happen almost immediately, typically within two days. Forex trading occurs over-the-counter (OTC) and is not done on a regulated exchange. For example, exchanging currencies at a bank is an OTC transaction.
Whether you’re jumping into spot trading or dabbling in Forex speculation, there are many opportunities and risks involved. Consider consulting a Forex management firm for investment insights and strategies to manage risks.
This text has been viewed 1,143 times.
`
