Currency
Trading has been in
the headlines these days a lot. The
Trading is attracting a lot of customers around the world these days as
it is done online and individuals with small amounts and internet access can
invest in these forex trading
markets easily and earn large amounts of profits with small investments.
Currency trading basically
deals with buying and selling of different currencies and making profits out of
the difference between these currencies. The forex market has become the largest growing market in the world
economy.
Every day a
total of $3 trillion is exchanged through interbank with the help of internet
hand in hand. In this process, the electronic trading platforms link the forex trading of currency from banks
across the world. These markets are open 24 hours daily because of the time
differences in the countries across continents.
Let us
Understand the Basic Terminologies used in Forex Trading
1. Exchange Rate - The rate of exchange is the
number of units of one currency in a particular nation which is exchanged in
order to acquire one unit of Currency of the other nation. Exchange rate works
upon the gaps between the prices of two currencies and makes a profit according
to them.
2. Initial
Margins - Initial Margins stands for the amount which is required to be
deposited in the margin account to perform the futures contract transactions
which are first entered.
3. Final
Settlement Date / Value Date - The last day of business in a particular month
is known as its final settlement date.
4. Spot Price - when a currency trading
is done in the spot market the price at which it is traded is known as the
currency's spot price.
