Foreign exchange transactions are the exchange of one country's currency into another country's currency at a certain price (that is, the exchange rate). It plays a decisive role in the process of global economic integration. It is not only a bridge connecting economic exchanges among countries in the world, but also an important part of the international financial system.
Different from other financial markets, the foreign exchange market has no specific place or central exchange, but trades through electronic networks among banks, enterprises and individuals. "Foreign exchange trading" means buying one of a pair of currencies at the same time and selling the other. Foreign exchange is traded in the form of currency pairs, such as Euro/USD or USD/JPY.
Extended data:
The eight trading methods of foreign exchange trading are as follows:
1. Spot foreign exchange transaction: Also known as spot foreign exchange transaction, it refers to the foreign exchange transaction mode in which both parties agree to handle the delivery within two working days after the transaction.
2. Forward transactions: also known as forward foreign exchange transactions, foreign exchange transactions are not delivered after the transaction, but are delivered at the time agreed in the contract.
3. Arbitrage: Arbitrage refers to a foreign exchange trading method that uses different foreign exchange markets, different currencies, different delivery times, exchange rates and spreads of some currencies to buy from low positions and sell from high positions to earn profits.
4. Arbitrage: A trading method that uses the interest rate difference between the two countries' currency markets to transfer funds from one market to another to earn profits.
5. Swap transaction: refers to a transaction that combines two or more foreign exchange transactions with the same currency but opposite trading directions and different delivery dates.
6. Foreign exchange futures: The so-called foreign exchange futures refer to futures contracts with exchange rate as the subject matter to avoid exchange rate risks. It is the earliest financial futures product.
7. Trading of foreign exchange options: foreign exchange options are bought and sold in foreign exchange, that is, the option buyer obtains the right after paying the corresponding option fee to the option seller, that is, after paying a certain option fee, the option buyer has the right to buy and sell the agreed currency at the agreed exchange rate and amount. On the expiration date of the contract, the buyer also has the right not to perform the above contract with the prior consent of both parties.
8. In the future, there will be a foreign exchange trading platform jointly established by banks and Internet investment companies to reduce unnecessary costs for personal investment.
Baidu encyclopedia-foreign exchange trading