Can you really make money trading forex?
Unlike the spot market, the forwards and futures markets
do not trade actual currencies. Instead they deal in contracts that represent
claims to a certain currency type, a specific price per unit and a future date
for settlement. In the forwards market, contracts are bought and sold OTC between
two parties, who determine the terms of the agreement between themselves. In
the futures market, futures contracts are bought and sold based upon a standard
size and settlement date on public commodities markets, such as the Chicago
Mercantile Exchange. In the U.S., the National Futures Association regulates
the futures market. Futures contracts have specific details, including the
number of units being forex, delivery and settlement
dates, and minimum price increments that cannot be customized. The exchange
acts as a counterpart to the trader, providing clearance and settlement.
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