at once
Also known as spot trading or spot trading, it refers to a trading behavior in which both parties go through the delivery procedures on the same day or two trading days after the completion of foreign exchange trading. Spot foreign exchange trading is the most commonly used trading method in the foreign exchange market, accounting for most of the total foreign exchange transactions. Mainly because spot foreign exchange transactions can not only meet the buyer's temporary payment needs, but also help buyers and sellers adjust the currency ratio of foreign exchange positions and avoid exchange rate risks.
2. Long-term
Different from spot foreign exchange transactions, it refers to foreign exchange transactions conducted by market participants on a specified date in the future (usually 3 business days after the transaction date) according to the provisions of forward contracts. Forward foreign exchange trading is an indispensable part of an effective foreign exchange market. In the early 1970s, the international exchange rate system changed from a fixed exchange rate to a floating exchange rate, which aggravated the exchange rate fluctuation and the financial market flourished, thus promoting the development of the forward foreign exchange market.
3. Futures trade
With the development of the futures trading market, currency (foreign exchange), which used to be the medium of commodity trading, has also become the object of futures trading. Forex futures trading refers to the trading activities of foreign exchange buyers and sellers in an organized exchange at a certain time (a certain date in the future) at a price determined by open outcry (similar to auction). Here are some concepts that readers may be somewhat vague, which are explained as follows: A. Standard quantity: the number of futures trading contracts in a specific currency (such as pound sterling) is the same, for example, the number of futures trading contracts in pound sterling is 25,000. B specific currency: refers to the specific type of transaction currency specified in the contract terms, such as Japanese yen for three months and US dollars for six months.
4. Buying and selling options
Foreign exchange option is usually considered as an effective hedging tool, because it can eliminate the risk of depreciation and retain the potential profitability. We introduced forward trading above, and the foreign exchange can be delivered on a specific date (such as May 1) or a specific period (such as May 1 to May 3 1). However, both parties are obliged to deliver the goods in full in two ways. Foreign exchange option means that one party to a transaction (option holder) has the right to conclude a contract and can decide whether to execute (deliver) the contract. If willing, the buyer (holder) of the contract can let the option expire without delivery. The seller has no right to decide whether to deliver the contract.