Foreign Exchange Market
The foreign exchange market is agreeingly the world’s largest market place with the average daily turnover of US $4 Trillion. With the market operating 24 hours a day, 5 days a week the foreign exchange market does not operate or advance on a regulated exchange, therefore is known as an OTC otherwise known as “over the counter” transaction. Most people at some point either when they are making a purchase overseas or traveling, they are in some way taking part in the Foreign exchange market, however increasingly many are now turning to the Foreign exchange market for the purposes of speculation, dealing at prices only open to financial institutions.
“What is the Foreign Exchange Market?” The foreign exchange market according to business dictionary.com states “Global market in convertible currencies are traded and their conversion rates are determined.” According to the international economic text book it says “ The foreign exchange market refers to the organizational setting within which individuals, businesses, governments, and banks buy and sell foreign currencies and other debt instruments.” (Carbaugh, 369) Currency Trading has grown to the the world’s largest market, and it continues to grow daily. An interesting thing about the foreign exchange market is that not only is it the largest market but it is the most liquid, compared to other markets such as the stock market. By liquid I mean their cash and assets can easy and quickly be turned into cash. The difference between any other market and the foreign exchange market is the fact that it allows the traders to deal with more than one trader. They can choose from many different people and this also allows comparison of prices because of the many options you have. Also, another thing about the foreign exchange market is that it is open twenty-four hours a day, seven days a week. The way a trade takes place in a foreign exchange market is there is a buying of one currency and the selling of another one.
“What is the Foreign Exchange Market?” The foreign exchange market according to business dictionary.com states “Global market in convertible currencies are traded and their conversion rates are determined.” According to the international economic text book it says “ The foreign exchange market refers to the organizational setting within which individuals, businesses, governments, and banks buy and sell foreign currencies and other debt instruments.” (Carbaugh, 369) Currency Trading has grown to the the world’s largest market, and it continues to grow daily. An interesting thing about the foreign exchange market is that not only is it the largest market but it is the most liquid, compared to other markets such as the stock market. By liquid I mean their cash and assets can easy and quickly be turned into cash. The difference between any other market and the foreign exchange market is the fact that it allows the traders to deal with more than one trader. They can choose from many different people and this also allows comparison of prices because of the many options you have. Also, another thing about the foreign exchange market is that it is open twenty-four hours a day, seven days a week. The way a trade takes place in a foreign exchange market is there is a buying of one currency and the selling of another one.
Bibliography: Carbaugh, Robert J. International Economics. Cambridge, MA: Winthrop, 1980. Print. "Introduction To Foreign Market Exchange." Gomarketsaus. N.p., n.d. Web. . "Investment and Financial Dictionary by InvestorWords.com." Investment and Financial Dictionary by InvestorWords.com. N.p., n.d. Web. 09 Dec. 2012. "More Articles." BusinessDictionary.com. N.p., n.d. Web. 09 Dec. 2012.