Forex trading or Foreign Exchange Trading refers to the simultaneous trading—that is, buying and selling—of two different currencies. It is done between and among major financial institutions, central banks, small retail currency traders or speculators, large international companies, government institutions, companies with overseas operations and the like.
Based on the amount of money being traded, the international forex trading market is the world's biggest financial market. Everyday, forex trading market gets an average revenue of $US 1 trillion—an amount far greater than the total revenues produced by all the stock and bond markets in the world.
Characteristics
Forex trading is a kind of over-the-counter trading—it occurs directly between to financial institutions or currency traders. The trading markets may be interconnected but there is no single unified market. Hence, there is also no single or standard rate. Each rate or price depends on what is being traded. However, the traders traditionally use nearly similar rates.
Another characteristic of a forex trading is that it operates 24 hours; thus, one can trade any time of the day. Also, there is no need of an exchange floor, it operates through a global electronic network where trading occurs over the telephone and computer networks. This characteristic also prevents delays that consume a lot of time.
Forex trading market is also very competitive and is highly liquid. This allows the parties to get low dealing costs and better price.
Top Currency Traders and Major Currencies Traded
Wall Street Journal Europe says ten major currencies account for 73 percent of the total forex trading volume. Among them are Deutsche Bank, UBS, Citigroup, HSBC, Barclays, Merrill Lynch, J.P. Morgan Chase, Goldman Sachs, ABN Amro, and Morgan Stanley.
Among the currencies mostly traded are the US, Canadian, and Australian dollars; Euro; Yen; and Swiss Franc.
A study conducted by the Bank for International Settlements says that the most traded products are Euro/USD, USD/JPY, and GBP/USD. The study noted that in spite euro's continuous growth, forex trading market remains to be concentrated in dollars.
The Trade
Trade happens when you accept the offered price and when the dealer confirms. Exchange floor is no longer required, as mentioned earlier.
In every trade, two currencies are always involved and the currencies traded serve as the products traded. Each currency has a price expressed in another currency such as 1 euro is equivalent to 1.204 dollar. In the said example, the euro trader sells the euro and buys the dollar. There are no further costs in the trade. There are no commissions and other fees as well.
Large multinational companies engage in forex trading when they are buying from and selling goods to other countries. However, this kind of forex trading encompass only a small portion of he daily activities in the foreign exchange market. Most of the trading activities are carried out by currency speculators who earn from the changes in value of a particular currency.
Key players in the Market
BIS study shows that more than 50%of the forex trading transactions are interbank transactions. Trading revenues of most commercial establishments and currency speculators are deposited in the bank.
Central banks also play a big role in the forex trading market. These banks control the supply of money, interest, inflation and target rates in order to stabilize the forex trading market.
Details Of The Chase PerfectCard Application
The Chase PerfectCard is for those who have very good credit and make frequent gasoline purchases. Unlike other gas credit cards where you are required to make your purchases at specific gas stations, the PerfectCard allows cardholders to earn a 3% rebate on gasoline at any station of their choice. In addition, any purchases made with the card during the first 90 days will earn a 6% rebate. A maximum of $15 per month in rebates can be earned. All other purchases earn the cardholder a 1% rebate.
The introductory interest rate is 0% on both purchases and balance transfers for twelve months. After the introductory period, a rate of 13.99% variable on purchases and 23.99% variable on cash advances is charged to those who qualify. The card carries no annual fee. The card has a 3% balance transfer fee with a minimum of $5 and maximum of $75, and a cash advance fee of 3% with a minimum of $5.This card also uses the two cycle average daily balance to calculate finance charges instead of the average daily balance used by most credit card issuers.
This card is most attractive to those who plan to pay in full after the introductory rate expires in order to avoid finance charges and will frequently use the card for gasoline purchases.
The benefits that a cardholder can expect to receive from the use of the Chase PerfectCard include the following:
• Online access to account information
• Reporting of lost and stolen cards
• Emergency cash and card replacement
• No liability to the cardholder for unauthorized transactions
• Protection services for fraud
• Purchase protection
• Extended warranty for purchases made with the card
• Roadside assistance
• Insurance for car rental
• Travel accident insurance up to $500,000
• Financial statement at year's end
• Emergency assistance a travel-related services
For more information or to obtain the Chase PerfectCard application, Joshua Shapiro recommends Find Credit Cards.
Details Of The Citi AAdvantage World MasterCard Application
The Citi AAdvantage World MasterCard is one of several credit cards that Citibank offers and is specifically designed for those who have very good credit and frequently travel on American Airlines. The rewards program allows cardholders to earn one mile for every dollar they spend on the card. The points can then be redeemed for hotels, car rentals, and free travel on American Airlines and any of the participating partners. The maximum annual limit is 100,000 miles, but this is waived for AAdvantage Executive Platinum, AAdvantage Platinum, and AAdvantage Gold members. There is no expiration for redeeming points as long as the account has activity at least once every three years.
Unlike most other cards, the AAdvantage World MasterCard offers members 15,000 bonus miles for the first purchase and has no pre-set spending limit. What this means is that cardholders can occasionally exceed their credit limit contingent upon their payment history and credit.
The interest rate for purchases at 17.99% variable is higher than most other reward cards, and cash advances have a minimum cap of 19.99%, and though this is tied to the Prime Rate, the interest will never go below that minimum. The annual fee is rather high at $85, but is waived for the first year. There is no balance transfer fee, but there is a cash advance fee of 3% assessed with a minimum of $5 charged.
Because of some of the high expenses connected to this card, those who will benefit the most are those who can afford to pay the balance each month, do not plan to spend more than $100,000 annually and can expect to earn a free ticket within the first year.
Some of the benefits you will receive from this card include the following:
• Online access to account information
• Access to reduced mileage awards
• Solutions to identity theft
• Reporting of lost and stolen cards
• Emergency cash and card replacement
• Automatic payment of bills
• Insurance on car rentals
• Financial statement at year-end upon request
• Assistance with lost luggage
• Medical and legal referral services
• Emergency assistance and travel-related services
• Travel accident insurance up to $1,000,000
For more information or to obtain the Citi AAdvantage World MasterCard application, Joshua Shapiro recommends Find Credit Cards.
