Forex (Foreign Exchange contraction) also called foreign exchange market or currency market is the second largest financial market in the world in terms of overall volume. (Just behind the market rates of interest).
This is the place to which the currencies, the currencies of different countries are bought and sold, and brokers or speculate on changes in these currencies. (Speculation on currencies representing the largest share of this market, far ahead of the buying and selling foreign currency to purchase goods and services in foreign currencies).
It is the encounter between the offer and the demand as in any free market, which determines the course of currency exchange and fixed rates.
Currency traders, operators who specialize in these transactions in foreign currencies, mainly operate on a basis of mutual agreement, and unlike the stock market for example, which is an organized market, the Forex is not centralized in a specific location.
The character of OTC and not centralized in this market means that operators will directly contact to complete a transaction, but it also means that there is not, at a time T, an accurate quote and determined between currencies.
Traders buy and sell currencies from one continent to another, depending on time differences and opening hours of their respective institutions. Trade and transactions have therefore place continuously, 24 hours 24, Monday through Friday.
The OTC market has the advantage of being less formal than a centralized market, but is also considered less transparent.
To address the specific problem of fluctuating exchange rates, prices are considered spread, which is the difference between purchase price and the selling price on the market.
Although the foreign exchange market is not centralized, it is noteworthy that the bulk of this trade is in London, followed by New York.
This is the place to which the currencies, the currencies of different countries are bought and sold, and brokers or speculate on changes in these currencies. (Speculation on currencies representing the largest share of this market, far ahead of the buying and selling foreign currency to purchase goods and services in foreign currencies).
It is the encounter between the offer and the demand as in any free market, which determines the course of currency exchange and fixed rates.
Currency traders, operators who specialize in these transactions in foreign currencies, mainly operate on a basis of mutual agreement, and unlike the stock market for example, which is an organized market, the Forex is not centralized in a specific location.
The character of OTC and not centralized in this market means that operators will directly contact to complete a transaction, but it also means that there is not, at a time T, an accurate quote and determined between currencies.
Traders buy and sell currencies from one continent to another, depending on time differences and opening hours of their respective institutions. Trade and transactions have therefore place continuously, 24 hours 24, Monday through Friday.
The OTC market has the advantage of being less formal than a centralized market, but is also considered less transparent.
To address the specific problem of fluctuating exchange rates, prices are considered spread, which is the difference between purchase price and the selling price on the market.
Although the foreign exchange market is not centralized, it is noteworthy that the bulk of this trade is in London, followed by New York.
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