Currency Forex online trading: Forex Market offers a range of options to trade and speculate in currencies; which means that investors can choose the option that matches best with their expectations and necessities.
The most popular are Forex spot, futures, options, and exchange-traded funds (or ETFs)
- Spot Market: In the spot market, currencies are traded instantly or ‘on the spot’ using the current market price. This means the exchange rate is in effect at the time that the deal is made. In currency, Forex online trading in this way of training is very common because it is the simplest way of exchange; basically two counterparties are agreeing to complete a currency exchange. In this type of agreement, one party commits to the delivery of a specified amount of one currency in exchange for a specified amount of a different currency, which is known as a currency pair. The advantage of this market is its simplicity, liquidity, tight spreads and 24 hour operations.
- Futures: Another way of investing in Currency Forex online trading is with future contracts. These are contracts to sell or buy assets at a specified price on a future date. Forex future was created in 1972 by the Chicago Mercantile Exchange. Future contracts are standardized and well-regulated and the market is very transparent. The information of the transaction and the price is easily available.
- Options: Is a type of contract that gives the right or the option, but not the obligation, to buy or sell currency at a specified price during a specified period time. Options are a good choice to avoid risk in exchange rates used in currency Forex online trading.
- Exchange Traded Funds – ETFs: An ETF is a package of assets that contain stocks and currencies to diversify the traders’ investment. Financial institutions create these packages and they can be traded like stocks through an exchange. The disadvantage of ETFs is the commissions and transactions costs are usually higher compared to just a currency trade because ETFs contain stocks.