Generally speaking, foreign exchange refers to foreign currency or various means of payment expressed in foreign currency for international settlement of creditor's rights and debts. To put it simply, the exchange of one country's currency for another country's currency is called foreign exchange, which is caused by economic exchanges between countries such as trade, investment and tourism. Because the currencies of various countries are not
, when paying abroad, one must first exchange one's own currency for foreign currency, or receive foreign foreign currency, and then exchange it for local currency to circulate in China, thus resulting in
currency exchange. In other words, as long as there is international trade, there will be foreign exchange transactions.
dynamic meaning: the transaction process of converting one country's currency into another country's currency and remitting it to another country by using international credit instruments, so as to pay off the creditor-debtor relationship formed by economic and trade exchanges between the two countries.
static meaning: foreign exchange is a means of payment expressed in foreign currency for international settlement. This means of payment includes credit instruments and securities expressed in foreign currency, such as
bank deposits, commercial bills, bank drafts, bank checks, foreign government treasury bills and their long-term and short-term securities.
at present, there are many kinds of financial commodity markets in the world, but they can be summarized as follows: stock market, interest market (including bonds and commercial bills), gold market (including gold, platinum and silver), futures market (including grain, cotton and oil), option market and foreign exchange futures, spot, option and swap market.
pricing method of foreign exchange rate
At present, all domestic banks refer to the international financial market to determine the exchange rate, and there are usually two pricing methods: direct quotations and indirect pricing.
direct quotations: direct quotations is also called the price marking method. It is a method of expressing the exchange rate of a certain unit of foreign currency in domestic currency. Generally speaking, how much domestic currency can be converted from one unit or 1 units of foreign currency.
most of the exchange rates in the market are also those set by direct quotations. Such as: Swiss franc, Japanese yen, Canada, RMB, etc.
example: USD/JPY = 11.56/6, USD/HKD = 7.794/5, USD/Swiss franc = 1.284/45.
indirect pricing method: indirect pricing method is also called quantity pricing method. It is a method of expressing the exchange rate of a certain unit of domestic currency in foreign currency. Generally speaking, it is how much foreign currency can be converted from one unit or 1 units of local currency.
The exchange rates that adopt indirect pricing method in the market mainly include euro, pound and Australian dollar.
Example: Euro/USD = 1.322/26, GBP/USD = 1.915/55, AUD/USD = .85/5
III. Foreign exchange market
1) Characteristics of foreign exchange market
In recent years, the foreign exchange market has been able to attract more and more people. The main characteristics of the foreign exchange market are:
1. There is a market but no market
The network of foreign exchange trading is global, and an unorganized organization has been formed. The market is connected with advanced information systems in a way that everyone agrees with, and traders do not have the membership of any organization, but they must gain the trust and recognition of the same industry. This foreign exchange market without a unified venue is called "market without market".
2. Circular operation
Due to the different geographical locations of financial centers around the world, the Asian market, the European market and the American market are connected into a global foreign exchange market that operates continuously
24 hours a day due to the time difference. This kind of continuous operation provides investors with an ideal investment place without time and space obstacles, and investors can find the best opportunity to trade < P >.
3. Zero-sum game
In the foreign exchange market, the fluctuation of exchange rate indicates the change of value and the change of stock value, which is completely different, because the exchange rate refers to the exchange ratio of two countries' currencies, and the change of exchange rate means the decrease of one currency value and the increase of another currency value.
In recent years, more and more funds have been invested in the foreign exchange market, and the fluctuation of exchange rate is expanding day by day, which makes the scale of wealth transfer larger and faster. Calculated by the daily turnover of $1.5 trillion in foreign exchange, a 1% increase or decrease means that 15 billion funds will be changed to new owners.
4. A truly fair, open and just market
A truly fair market. Without a banker's market, no one or institution can manipulate the foreign exchange market with their funds.
a truly open market with no insider information, the foreign exchange market is the financial market with the most transparent information and the most consistent with the laws of a completely competitive market.
a truly fair and unrestricted market, the foreign exchange market has no price limit system, and there are no trading rules within T+1.
2) Participants in the foreign exchange market
The main participants in the foreign exchange market are as follows: foreign exchange banks, governments or central banks, foreign exchange brokers and customers.
1. Foreign exchange banks. Foreign exchange banks are the primary participants in the foreign exchange market, including professional foreign exchange banks and some large commercial banks designated by the central bank without foreign exchange trading departments.
2. Central Bank. The central bank is the ruler or regulator of the foreign exchange market.
3. foreign exchange broker. Foreign exchange brokers are intermediaries between central banks, foreign exchange banks and customers, and they have very close ties with banks and customers.
4. customers. In the foreign exchange market, all companies or individuals who conduct foreign exchange transactions in foreign exchange banks are customers of foreign exchange banks.
3) major foreign exchange trading markets in the world
At present, foreign exchange markets with international influence are basically in western industrialized countries. The major foreign exchange markets in the world are:
1. new york foreign exchange market in the United States; 2. London foreign exchange market in the United Kingdom; 3. Tokyo foreign exchange market in Japan; 4. Singapore foreign exchange market; 5. Zurich foreign exchange market in Switzerland; 6. Hongkong foreign exchange in China. Market
7. Frankfurt foreign exchange market
4) Trading time of foreign exchange market
Opening time and closing time of regional cities
Wellington, New Zealand 4: -13:
Sydney, Australia 6: -15:
Tokyo, Japan 8: -15: 3
Singapore 9: -16:
Hong Kong 1. P > new york, USA, 2: 3-4:
IV. Trading details
1) Trading hours
Trading hours are from 8: on Monday to 4: on Saturday (Beijing time)
(2) Nikkei index, Monday to Friday, 8: -1: 15 at 11: . Monday to Friday 15:15-23:3
FTSE UK Index, Monday to Friday 15:-23:3
2) Trading commodities
Foreign exchange trading
Direct offer: EUR/USD (Euro), USD/JPY (Yen), GBP/USD (Pound), USD/CHF (Swiss Franc)
AUD. CAD (Canadian Dollar)
Crossboard: EUR/JPY (Euro against Japanese Yen), EUR/GBP (Euro against British Pound), EUR/CHF (Euro against Swiss Franc),
GBP/JPY (British Pound against Japanese Yen), GBP/CHF (British Pound against Swiss Franc), AUD/JPY (Australian Dollar) P5
3) Bid-ask spread is 4-5 points
4) Contract unit
Foreign exchange is USD 1, per lot
5) Minimum trading volume
Standard account is .5 lots of contracts
6) Bid-ask quotation shows
real-time market quotation, and you can trade by clicking the price yuan.
7) setting buying and selling orders
customers can set buying and selling orders at any time, such as stop loss or stop winning orders. However, the price set by the instruction needs to be beyond 2
basic points of the real-time quotation in the market before it can be set successfully. If the current price of Euro is 1.1327/31, and the customer wants to preset the command price of Euro, he can
set $> 1.1351 or $ < 1.137。
8) margin requirement
the minimum margin requirement for a standard account is more than $1, per lot. If the funds in the customer's account are less than the requirements of the account category, the computer program of the trading system will
automatically close all the opened positions in the account to protect the risks of the customer's funds and traders.
9) Interest
For all accounts, the overnight interest for each lot of 1, yuan is USD 1, and the settlement time is 4: Beijing time.
if the contract is not settled before the market closes on Friday, three days' overnight interest will be charged. For contracts that are not settled before the holiday market closes, the interest will be calculated according to the number of holiday days (holidays-which are subject to international holidays, such as Christmas)
1) Transaction confirmation
All transaction confirmation messages will be displayed on the trading platform, and the details, such as trading time, price, lots, profit and loss, will be clearly displayed on the trading platform of customers.