Margin foreign exchange is a kind of financial derivatives. It is a financial derivative that invests a certain proportion of funds in the foreign exchange market, trades in various currencies, and conducts value-added transactions hundreds or even hundreds of times in the direction of exchange rate fluctuations, also known as leveraged foreign exchange. Margin foreign exchange came into being in the 1970s.

In order to prevent the transaction from losing money and not being settled, a certain proportion of funds are used as a deposit. Generally, the initial margin ratio is 5%- 10% of the current exchange rate. Because the margin ratio is very low, the leverage is very high. Margin foreign exchange came into being in the 1970s.

Therefore, margin foreign exchange is the most attractive derivative in financial products. A successful transaction can make investors get rich returns in a short time. At the same time, improper operation will also lead to huge losses.

Margin foreign exchange has the characteristics of futures, also known as currency futures. It is a futures contract based on foreign exchange and the first variety of financial futures. Mainly used to avoid foreign exchange risk, that is, exchange rate risk.

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Since 1972 was first introduced in the international money market (IMM) of Chicago Mercantile Exchange (CME), foreign exchange margin trading has developed rapidly. The listed varieties mainly include five main varieties: GBP/USD, EUR/USD, AUD/USD, USD/JPY and USD/CHF. There are also cross currency disks: euro against Japanese yen, euro against British pound, euro against Swiss franc and so on.