What is foreign exchange transaction?

  • Foreign Exchange is short for a type of foreign exchange transaction and is also called Forex (in Korea, it is called FX margin trading. Foreign exchange transactions, which are divided into FX transactions, spot exchange, forward exchange, and currency futures, mean the act of selling one country's currency and buying another's currency by exchanging the currencies of the two countries at the same time.
  • For example, when traveling abroad, the exchange of domestic currency into the currency of the country of travel, and the exchange of foreign currency with foreign currency in order to settle the transaction price in the course of economic exchange between countries are all called foreign exchange transactions.
  • Foreign exchange transactions are the most fluid market among all investment products traded around the world, as they are formed not only by the central banks of each country but also by large market participants for trade, capital and revenue transactions. The average daily turnover of the global foreign exchange market is about $5.345 trillion [Bank for International Settlements (BIS), September 2013] which is the largest financial market in the world.

What is foreign exchange transaction?

  • In the foreign exchange market, about 5% of total traders intervene to stabilize their currencies, such as the government and multinational corporations, or participate in risk management at the corporate level, and 95% are formed by market participants seeking profit transactions, i.e. capital gains from changes in exchange rates.
  • The foreign exchange market developed rapidly from the fixed exchange rate system to the United States in 1973 when major countries adopted the floating exchange rate system, and technological advances in computers, the Internet, software, etc. turned the market, which was limited to large traders such as international banks and corporate institutions, into an environment where small individual investors could participate in real-time transactions.

currency pair type

  • EUR / USD It is the world's largest currency pair of European euros and U.S. It is the most active trading in the foreign exchange market and accounts for more than 24% of the total daily foreign exchange volume. Therefore, the currency pair with the least spread is due to high liquidity.
  • USD / JPYAlso called Gopher, this is the second most traded currency pair in the FX market after EUR/USD. The yen is a currency that is heavily influenced by the movements of Asian stock markets, which will affect USD / JPY's movements, including the Asian stock market, the Federal Reserve Bank of the United States and the Bank of Japan.
  • USD / CAD Also known as Loonie (because of the loon bird that appears in the Canadian dollar coins) is heavily influenced by commodity prices, especially Canada's major exports of 'oil' and 'iron ore'. The difference in interest rates between the U.S. and Canada is also one of the factors affecting price fluctuations.

What is foreign exchange transaction?

  • USD / CHF The Swiss franc is a currency that provides safe haven for currency traders. When avoiding market risks, value rises and vice versa. These pairs have characteristics that are frequently traded during designated academic events and economic crises.
  • AUD / USD AUD has the characteristics of being recognized as another commodity currency, along with CAD, which is heavily influenced by Australian metal and mineral exports. As the price of the product increases, we can see that the value of AUD increases.
  • GBP / USD It's probably the oldest call pair on FX. This pair is also known as 'cable' and represents a telegraph line used to send purchase and sale orders between London and New York. Both the United States and Britain have large economies of scale and deep associations, so the movement of monetary pairs has an overall impact on the two countries' annual GDP.

Indices CFD

  • Index CFD is a product that deals with changes in the price of the stock price index.
  • Difference Transaction (CFD) is a derivative product that the trader does not own, but can benefit from predicting changes in the price of the product and taking a buying/selling position. The dealer 'owns' the change in the price of the asset while holding the position.
  • Revenue / loss depends on the direction of variation in the index
  • US30Usually known as Dow Jones Industrial Average, 'Dow'. It is the oldest index in the world and represents the stock prices of 30 blue-chip companies listed on the New York Stock Exchange.
  • FRA40A key index of France and an index that follows French Cac40, also known as Cac Quarante.
  • GER30The GER30 index is known as DAX30 and is a major index in Germany
  • UK100UK100 is affected by FTSE100. This is an index of the stock prices of 100 British companies listed on the London Stock Exchange
  • GER30The GER30 index is known as DAX30 and is a major index in Germany
  • AUS200 AUS200 is an index that follows ASX200, which is affected by the share prices of the 200 most valuable companies in Australia.
  • EUSTX50 The EUSTX50 follows Euro Stoxx 50, a stock market index that is affected by the performance of 50 top stocks on a market basis in the eurozone.
  • JPN225 JPN225 CFD follows Nikki 225 or simply Nikki. It is Japan's main stock market index and includes 225 major Japanese companies.
  • SPX500 The SPX500 CFD follows S & P500 or simple S & P, and is one of the largest and most widely traded stock indexes in the world.
  • NDX100 The NDX100 includes the 100 largest and most actively traded U.S. companies listed on the Nasdaq Stock Exchange. Included are companies in a variety of industries except finance.
  • HK50 The Hang Seng Index (HK50) is an index affected by the Hong Kong Stock Exchange. Calculated as the weighted average value of China's largest corporate stock traded on this exchange.

All hours are GMT + 3

  • Dow (US 30) 00:00 to 24:00 (Monday 01:00)
  • CAC 40 (FRA40) 09 : 00-23 : 00
  • German Stock Price Index DAX 30 (GER30) 00 : 00-24 : 00 (Monday 01:00)
  • FTSE 100 (UK100) 00 : 00-24 : 00 (Monday 01:00)
  • Euro Stoxx 50 Future (EUSTX50) 00 : 00-24 : (Monday 01:00)
  • NASDAQ 100 (NDX100) 00 : 00-24 : 00 (Monday 01:00)
  • S & P / ASX 200 (ASX200) 00 : 50-07 : 30, 08 : 10-23 : 00
  • Nikki 225 (JPN225) 00 : 00-24 : 00 (Monday 01:00)
  • Hang Seng (HSI) (HK50) 00 : 00-24 : 00 (Monday 01:00)
  • Standard & Poor 's 500 (SPX500) 00 : 00-24 : (Monday 01:00)

Commodities CFD

  • Trade in goods is buying and selling raw materials, which are generally traded in the form of gifts. There are many items ranging from cotton and wheat to oil and metals such as gold and silver. The global economy is greatly affected by the price of these goods
  • It is affected by a variety of complex factors other than the production and consumption of goods, such as the political situation of the producing country, economic events, natural disasters, and USD (which is generally priced at USD). Commodity prices tend to be on a constant trend, offering long-term trading opportunities for up to 5 to 10 years.
  • Crude oil is classified according to location, quality, and characteristics. The most commonly traded crude oil is Brent Sweet Light Crude and West Texas Intermediate (WTI), which provide a benchmark for the transaction price of other crude oil.
  • Brent crude is extracted from the North Sea and WTI is extracted from North America. WTI is recognized for its highest quality and is mainly used in diesel fuel and mainly in the production of Brent high-quality gasoline. The price of the two representative crude oils is determined including transportation costs, production, and storage facility availability.
  • But Brent Light Sweet Crude Oil is more universal than WTI, making it a global benchmark for the energy market, more closely related to the global oil industry than wti. In addition, global traders tend to prefer Brent because of the greater price fluctuation compared to WTI. Although the prices of the two products have been only a few dollars apart over the decades, Brent has soared over the past decade and is now trading an average of five to ten dollars above WTI.

Metal: Gold and Silver

  • Gold was the most precious metal in history. It has always been associated with the value of money being set, and now it provides traders with a safe haven in the event of a global financial crisis
  • There is a 'silver' that has been associated with currency together. It does not have a gold-like status, stability, but it is attractive to traders who are looking for a greater return because of the relatively greater 'silver' variability compared to gold. However, it is important to remember that every transaction involves a risk

Stocks CFD

  • Stock CFD is a difference transaction for individual shares. This allows traders to predict and invest in differences in price movements without actually buying or selling shares in the company
  • Difference Transaction (CFD) is a derivative product that the trader does not own, but can benefit from predicting changes in the price of the product and taking a buying/selling position. The dealer 'owns' the change in the price of the asset while holding the position.
  • The index CFD reflects the average movement of all stock prices within the index, which can reduce volatility. In contrast, it reflects changes in the price of individual shares in stock CFD. The variability is bound to be greater. It's very rare for a news item to move an index by more than a percentage, but it's really common for a stock to move more than 5 percent a day
  • Stock CFD transactions focus on the share price of a single company and index CFD transactions focus on the overall market flow

Crypto CFD

  • It is also called 'cryptocurrency' to mean that there is no real money such as paper money or coins and that uses encryption technology
  • It has the advantage of being excellent as a means of value storage because it does not require production costs and reduces transaction costs such as transfer costs, and it is stored on hard disks, and there is no risk of theft or loss. Difference Transaction (CFD) is a derivative product that the trader does not own, but can benefit from predicting changes in the price of the product and taking a buying/selling position.
  • The dealer 'owns' the change in the price of the asset while holding the position

Read risk disclosure before trading Forex/CFDs.

Forex/CFD trading involves substantial risk of loss and is not suitable for all investors.

High Risk Warning Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

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