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What is foreign exchange margin?

Forex refers to the exchange of foreign currencies. Foreign exchange margin actually refers to the general term for foreign exchange transactions that use margin. As a market with an average daily trading volume of 1.5 trillion U.S. dollars, in April 2010, it reached a market with a daily trading volume of 4 trillion U.S. dollars. The scale of the foreign exchange market is 46 times that of the global futures market. Because of this, the foreign exchange market is the most liquid market in the world.

In a nutshell, foreign exchange refers to foreign currencies or other currencies. Various means of payment represented by currencies for international settlement of claims and debts. Foreign exchange margin Foreign exchange margin is one of the financial derivatives instruments. It is a financial derivative that uses a certain proportion of funds to buy and sell various currencies in the foreign exchange market, and conducts value-added transactions that expand hundreds or even hundreds of times in response to the direction of exchange rate fluctuations. It is also called leveraged foreign exchange. Margin foreign exchange was created in the 1970s.

Foreign exchange margin has the characteristics of futures, also known as currency futures. It is a futures contract based on foreign exchange and is the first type of financial futures. It is mainly used to avoid foreign exchange risks, that is, exchange rate risks.