Forex Broker ?
Saturday, 26 July 2008
The currency / foreign exchange market is one of the largest and most dynamic market. Nearly $ 1.8 billion are traded each day. Forex The word is derived from the word change.
A broker is a person or company that acts as an intermediary between buyer and seller. Forex brokers are companies that deal in foreign exchange. The foreign exchange market is very similar to equity markets, except that the typical exchange brokers not to pay a commission. However, foreign exchange brokers are required to have a license.
Forex brokers earn money from the spread (also called "pip"). The gap is the difference between the prices at which a currency is bought and sold. A pip is the smallest price increase in one currency. For example, in Euro / U.S. Dollar (USD), the passage of 0.9008 to 0.9009 is a pip. In U.S. Dollar / Japanese Yen (USD / JPY), the transition from 127.41 to 127.42 is a pip.
Forex brokers can be compared on the basis of the spread they charge. Most foreign exchange brokers publish live or delayed prices on their Web sites so that investors can compare the differences. However, it is necessary to check if the spread is fixed or variable. Variable spreads appear small and attractive when the market is calm, but when the market is held the forex broker widens the spread, meaning that the investor will win if the market is favourable.
Forex brokers are usually tied to large banks or lending institutions. The reason is that enormous sums of money traded on the exchange markets. Forex brokers are required to register with the Futures Commission Merchant (FCM), and are regulated by the Commodity Futures Trading Commission (CFTC).
A new trend among brokers change is the emergence of online brokers currency, which offers to negotiate "retailers" using advanced technologies. With these facilities, anyone with a computer and an Internet connection can exchange currency in the markets.
Labels: forex
posted by Master @ 03:09,