Posted on 13 September 2011
Tags: account, asset, basis, bell, bell bottoms, Chicago, Chicago Mercantile Exchange, class, CME, contracts, cost, currencies, current market, Different, div, doesnâ, ETFs, example, exchange, Exchange-traded, Exchange-traded funds, expiration, Expiration Date, fashion, Feature, financial tool, forex, forex brokers, Forex Market, forex traders, Futures, height, Horizon, information, International, Investment, limitation, liquidity, marketâ, mercantile, mercantile exchange cme, Method, News, obligation, option, participation, Philadelphia, Platform, platform boots, price, Research, right, setback, simplicity, spotâ, standardization, starting, stock, success, title, trader, Trading, transaction, way, Ways, work
Forex trading is an ever changing market, where you cannot guarantee success with a particular method of trading. That is the reason why forex traders always come up with different trading ways for investment or speculating in currencies. Among these ways, the most popular ways include options, forex spot, and exchange-traded funds or ETFs.
Forex Futures
They are the contracts for buying or selling a certain type of asset at a particular price on a future date. That’s the reason they are called “Futures”. Futures were first time created by the Chicago mercantile Exchange (CME) date back in 1972 during the time when platform boots and bell bottoms were still in fashion. The forex market has become very transparent and it is regulated regularly since the standardization of forex future and the starting of trading through a centralized exchange. It simple indicates that information about price and transaction is readily available.
Spot Market
Another way of forex trading is called ‘Spot Trading”. In this way of forex trading, trading of currencies is done on immediate basis or “on the spot” by using the current market price of the currencies. Due to “on the spot” trading of currencies it is referred to as “Spot Market”. The most interesting feature of this way of trading is its liquidity, simplicity, 24/7 operations and tight spreads.
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Posted on 08 March 2011
Tags: a brokerage, Beginners, British pound, british pound euro, broker, brokerages, brokers, Chicago Board of Trade, Chicago Mercantile Exchange, commodities, day trade, Day traders, Day trading, day trading markets, deutsche boerse, direct access, dollar, euronext paris, exchange, Experience, experienced traders, factors, forex, forex stock markets, future market, Futures, gold, important, indexes, knowledge, low margin, Margin, Markets, monep, Nasdaq, options futures, restrictions, RSI, Securities and Exchange Commission, start, stock, Stock Exchange, stock indexes, stock market, Swiss franc, technical indicator, traded, trader, Trading, Trading Market, trading strategy, Types, typical stock, us stock exchange, us stock market
A great number of day trended markets are available like options, futures, stock markets, and currencies. Majority of people only know about stock markets, but only small number of people know about other traded markets that are working for day traders. Some of these markets of day trading are far more popular than typical stock exchange.
Popular Day Trading Markets
From many day traded markets, few most popular are listed below.
- Future markets that are based on stock indexes (Nasdaq, DAX)
- Future markets that are based on commodities (wheat, gold, oil)
- Future markets that are based on currencies (like British Pound, Euro, Swiss Franc)
- Currencies (Euro to British Pound, Euro to US Dollar)
- Options on the futures
Important note: above list does not contain any stock market because the United States Securities and Exchange Commission has limited the US stock market from day trading. If you want to check the details of these restrictions then you can read it on internet on the official website of the US SEC or the US stock exchange.
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Posted on 08 August 2009
Tags: Chicago Mercantile Exchange, currency option, exchange-traded currency options, foreign exchange option, Forex Market, FX market, FX option, FX option volume, FX options market, International Securities Exchange, OTC market, Philadelphia Stock Exchange
In finance, a foreign exchange option (which is commonly shortened to just FX option or currency option) is a derivative financial instrument where it is not the right but the obligation of the owner to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date.
For options of any kind in the world, the FX options market is the deepest, largest and most liquid market. Most of the FX option volume is traded OTC and is lightly regulated, but the trade of fraction takes place on exchanges like the International Securities Exchange, Philadelphia Stock Exchange, or the Chicago Mercantile Exchange for the options on futures contracts. In 2005, the global market for exchange-traded currency options was notionally valued by the Bank for International Settlements at $158,300 billion.
Terms
Generally if one think about an option he assumes that he is buying an asset: for example, you can have a call option on oil, that will allow you to buy oil at a given price. this situation can be considered more symmetrically in FX, where one exchanges: a put on GBPUSD will allow one to exchange GBP for USD: at once it is a put on GBP and a call on USD.
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Ratio of notional
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The ratio of the notionals in an FX option is the strike, it is not the current spot or forward. It is ot be noted, when making an option strategy from FX options, one must take care that he has to match the foreign currency notionals, and not the local currency notionals, if this is not done then the foreign currencies received and delivered don’t offset and one is left with residual risk.
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Posted on 03 August 2009
Tags: cashflow, Chicago Mercantile Exchange, CME, CME Euro FX Futures, currency futures, Currency Rates, currency trading, Euronext.liffe, exchange rate, exchange rate locked, fixed exchange rates, fluctuations in exchjange rates, foreign exchange future, foreign exchange market, forex, futures contract, futures exchanges, FX future, FX market, Hedging, History of Currency Futures, IMM, International Monetary Market, Speculation, Tokyo Financial Exchange, US Dollar, Uses of Currency Futures
A currency future, which is also referred to as FX future or foreign exchange future, is a futures contract. It is used to exchange one currency for another at a specified date in the future at a price (exchange rate) that is fixed on the purchase date. Typically, one of the currencies is the US dollar. Then the price of a future is settled down in terms of US dollars per unit of other currency.
This method can be different from the standard way of quoting in the spot foreign exchange markets. A certain amount of other currency is the trade unit of each contract, for instance €125,000. Most contracts posses physical delivery, so for those contracts that are held at the end of the last trading day, actual payments are made in each currency. However, before that most of the contracts are closed out. The contracts can be closed out by the investors at any time prior to the contract’s delivery date.
History
Less than one year after the system of fixed exchange rates was abandoned along with the gold standard, in 1972 Currency futures were first created at the Chicago Mercantile Exchange (CME). In the early 1970s, some commodity traders at the CME did not have access to the inter-bank exchange markets, when they presumed that significant changes were about to take place in the currency market.
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Posted on 31 July 2009
Tags: Bank for International Settlements, brokers, central banks, Chicago Mercantile Exchange, corporations, currencies, currency futures, currency speculators, currency trading, daily turnover, dealers, derivatives, Euromoney's annual FX Poll, exchange-traded FX, foreign exchange, foreign exchange market, foreign exchange market volume, foreign exchange trading, forex, fund management assets, FX, FX futures volume, global foreign exchange, global turnover, governments, Large banks, large international banks, London foreign exchange market, Market size and liquidity, market-maker, minimum trading size, most active traders account, most liquid financial markets, New York foreign exchange market, OTC market, other financial institutions, retail broker, retail traders, Tokyo foreign exchange market, Trade, trade of currencies, trading of FX derivative products, traditional transactions, UK
At present, one of the largest and most liquid financial markets in the world is the foreign exchange market. Large banks, central banks, currency speculators, corporations, governments, and other financial institutions are all included among its traders. There is a continuous growth in the average daily volume in the global foreign exchange and related markets.
It has been reported by the Bank for International Settlements that the daily turnover has been over US$ 3.2 trillion in April 2007 . Since then, we can see continuous growth in the market. According to Euromoney’s annual FX Poll, between 2007 and 2008 volumes grew a further 41% .
London as Global Center for Foreign Exchange
Out of the $3.98 trillion daily global turnover, in London trading has been accounted for around $1.36 trillion, or we can say that it is 34.1% of the total, and this makes London by far the global center for foreign exchange. In second place it is New York, as trading in New York is accounted for 16.6% and on third places we have Tokyo where the trading has been accounted for 6.0%. Moreover, $2.1 trillion was traded in derivatives in addition to “traditional” turnover.
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