Forex Quotes For Website – Understanding Forex Trading

Forex Quotes For Website

The Foreign Exchange market, also referred to as the “Forex” or “FX” market, is the largest financial market in the world, with a daily average turnover of well over US $1 trillion – 30 times larger than the combined volume of all U.S. equity markets. The word FOREX is derived from the words FOReign EXchange.

Spot and Forward Foreign Exchange

Forex trading may be for spot or forward delivery. Spot transactions are generally undertaken for an actual exchange of currencies – delivery or settlement – for a value date two business days later.

Forward transactions involve a delivery date further in the future, sometimes as far as a year or more ahead. By buying or selling in the forward market, it is possible to protect the value of any anticipated flows of foreign currency, in terms of one’s own domestic currency, from exchange rate volatility. Forex Quotes For Website

Difference Between Foreign Currency and Foreign Exchange

Anyone who has traveled outside their country of residence would have had some exposure to both foreign currency and foreign exchange.

For example, if you live in the United States and travelled, lets say, to London, England you may have exchanged your home currency i.e. US $ for British Pounds. The British Pounds are referred to as a foreign currency and the act of exchanging your US $ for British Pounds is called foreign exchange.

The Foreign Exchange Market

Unlike some financial markets, the foreign exchange market has no single location as it is not dealt across a trading floor. Instead, trading is done via telephone and computer links between dealers in different trading centres and different countries.

The FX market is considered an Over The Counter (OTC) or ‘interbank’ market, as transactions are conducted between two counterparts over the telephone or via an electronic network. Trading is not centralized on an exchange, as it is with the stock and futures markets. Forex Quotes For Website

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