National Stock Exchange
NSE likely to overtake BSE in marketcap . The Financial Express.http://www.financialexpress.com/news/NSE-likely-to-overtake-BSE-in-marketcap/499964/ Retrieved 2009-08-11.
India’s SEBI raises exchange ownership cap to 15%
NSE - About Us - Facts & Figures
"World Federation of Exchanges (2007)"
Now, NSE 2nd fastest growing stock exchange
National Stock Exchange of India via Wikinvest
NSE - Major indices
Monday, November 23, 2009
You See also
· List of South Asian stock exchanges
· Mahurat trading
· Clause 49
· Share bazaar
· Bombay Stock Exchange
how to documents for exams certificate
· Mahurat trading
· Clause 49
· Share bazaar
· Bombay Stock Exchange
how to documents for exams certificate
Certifications
NSE also conducts online examination and awards certification, under its programmes of NSE's Certification in Financial Markets (NCFM). Currently, certifications are available in 19 modules, covering different sectors of financial and capital markets. Branches of the NSE are located throughout India.
Exchange Traded Funds on NSE
NSE has a number of exchange . These are typically index funds and GOLD etfs. Some of the popular etf's on NSE are.
1. NIFTYBEES - ETF based on NIFTY index Nifty BEES Live quote 2. GoldBees - ETF based on Gold prices. Tracks the price of Gold. Each unit is equalent to 1 gm of gold and bears the price of 1gm of gold. 3. BankBees - ETF that tracks the CNX Bank Index.
1. NIFTYBEES - ETF based on NIFTY index Nifty BEES Live quote 2. GoldBees - ETF based on Gold prices. Tracks the price of Gold. Each unit is equalent to 1 gm of gold and bears the price of 1gm of gold. 3. BankBees - ETF that tracks the CNX Bank Index.
Indices
NSE also set up as index services firm known as India Index Services & Products Limited (IISL) and has launched several stock indices, including :
· S&P CNX Nifty (Standard & Poor's CRISIL NSE Index)
· CNX Nifty Junior
· CNX 100 (= S&P CNX Nifty + CNX Nifty Junior)
· S&P CNX 500 (= CNX 100 + 400 major players across 72 industries)
· CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap 200)
· S&P CNX Nifty (Standard & Poor's CRISIL NSE Index)
· CNX Nifty Junior
· CNX 100 (= S&P CNX Nifty + CNX Nifty Junior)
· S&P CNX 500 (= CNX 100 + 400 major players across 72 industries)
· CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap 200)
Hours
NSE's normal trading sessions are conducted from 9:55 AM India Time to 03:30 PM India Time on all days of the week except Saturdays, Sundays and Official Holidays declared by the Exchange ( or by the Government of India ) in advance. The exchange in association with BSE ( Bombay Stock Exchange Ltd., ) thinking to revise it's timings from 9.00 AM India Time till 5.00 PM India Time.
There were System Testing going on and opinions / suggestions / feedback on the New Proposed Timings are being invited from the Brokers across India. And finally on Nov 18, 2009 regulator decided to drop their ambitious goal of longest Asia Trading Hours due to strong opposition from its members.
There were System Testing going on and opinions / suggestions / feedback on the New Proposed Timings are being invited from the Brokers across India. And finally on Nov 18, 2009 regulator decided to drop their ambitious goal of longest Asia Trading Hours due to strong opposition from its members.
Markets
Currently, NSE has the following major segments of the capital market:
· Equity
· Futures and Options
· Retail Debt Market
· Wholesale Debt Market
· Currency futures
NSE became the first stock exchange to get approval for Interest rate futures as recommended by SEBI-RBI committee, on 31st August,2009, a futures contract based on 7% 10 Year GOI bond (NOTIONAL) was launched with quarterly maturities.
· Equity
· Futures and Options
· Retail Debt Market
· Wholesale Debt Market
· Currency futures
NSE became the first stock exchange to get approval for Interest rate futures as recommended by SEBI-RBI committee, on 31st August,2009, a futures contract based on 7% 10 Year GOI bond (NOTIONAL) was launched with quarterly maturities.
Innovations
NSE has remained in the forefront of modernization of India's capital and financial markets, and its pioneering efforts include:
· Being the first national, anonymous, electronic limit order book (LOB) exchange to trade securities in India. Since the success of the NSE, existent market and new market structures have followed the "NSE" model.
· Setting up the first clearing corporation "National Securities Clearing Corporation Ltd." in India. NSCCL was a landmark in providing innovation on all spot equity market (and later, derivatives market ) trades in India.
· Co-promoting and setting up of National Securities Depository Limited, first depository in India.
· Setting up of S&P CNX Nifty.
· NSE pioneered commencement of Internet Trading in February 2000, which led to the wide popularization of the NSE in the broker community.
· Being the first exchange that, in 1996, proposed exchange traded derivatives, particularly on an equity index, in India. After four years of policy and regulatory debate and formulation, the NSE was permitted to start trading equity derivatives
· Being the first and the only exchange to trade GOLD ETFs (exchange traded funds) in India.
· NSE has also launched the NSE-CNBC-TV18 media centre in association with CNBC-TV18. a
It is the one of the most important stock exchanges in the world.
· Being the first national, anonymous, electronic limit order book (LOB) exchange to trade securities in India. Since the success of the NSE, existent market and new market structures have followed the "NSE" model.
· Setting up the first clearing corporation "National Securities Clearing Corporation Ltd." in India. NSCCL was a landmark in providing innovation on all spot equity market (and later, derivatives market ) trades in India.
· Co-promoting and setting up of National Securities Depository Limited, first depository in India.
· Setting up of S&P CNX Nifty.
· NSE pioneered commencement of Internet Trading in February 2000, which led to the wide popularization of the NSE in the broker community.
· Being the first exchange that, in 1996, proposed exchange traded derivatives, particularly on an equity index, in India. After four years of policy and regulatory debate and formulation, the NSE was permitted to start trading equity derivatives
· Being the first and the only exchange to trade GOLD ETFs (exchange traded funds) in India.
· NSE has also launched the NSE-CNBC-TV18 media centre in association with CNBC-TV18. a
It is the one of the most important stock exchanges in the world.
National Stock Exchange of India
The National Stock Exchange of India Limited (NSE), is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization of around Rs 47,01,923 crore (7 August 2009) and is expected to become the biggest stock exchange in India in terms of market capitalization by 2009 end.Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty known as the Nifty, an index of fifty major stocks weighted by market capitalisation.
NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. There are at least 2 foreign investors NYSE Euronext and Goldman Sachs who have taken a stake in the NSE. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India In October 2007, the equity market capitalization of the companies listed on the NSE was US$ 1.46 trillion making it the second largest stock exchange in South Asia. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities.It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%.
NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. There are at least 2 foreign investors NYSE Euronext and Goldman Sachs who have taken a stake in the NSE. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India In October 2007, the equity market capitalization of the companies listed on the NSE was US$ 1.46 trillion making it the second largest stock exchange in South Asia. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities.It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%.
Sunday, October 18, 2009
Bullet Advisory Analyses Indian Stocks NSE BSE
Bullet Advisory Analyses Indian Stocks NSE BSE
Bullet Advice For Indian Stocks Weekly –Nifty touches 52-week high BSE Sensex (15922.30) and Nifty (4732.35) closed 4.5 % and 4.51% up respectively last week.Nifty Future September was quoting at 5.45 points premium.Nifty Call Option September 4800 was very active.Support for Sensex is at 15530 and Nifty at 4590.Resistance for Sensex is at 16340 and Nifty is at 4870.Crude oil was at 72.87 $. Tata Steel declared Q1 results which.were below market expectations.Shares of NHPC will start trading in BSE and NSE on 1st September 2009.RNRL-RIL case hearing was adjourned to 20th October instead of 1st September 2009. Unitech and Tata Steel added Open Interest in September series.Dabur and FinanTech shaded Open Interest.Huge position was build up at DLF September Call Option Strike Price 400.Good build up was also seen at Unitech September Call Option Strike Price 100.. 1)JPHYDRO(84.95) Lot Size-3125 Buy One Call Option of September Strike Price 85@ Rs.5.85 Sell One Call Option of September Strike Price 95@2.00 Rs. Premium .Paid=5.85*3125=.18281.25 Rs. Premium Received=2*3125=6250.00 Rs. Net Premium Paid=18281.25-6250= 12031.25 Rs. Maximum Profit==95-85=10*3125=31250-12031.25=19218.75 Rs. Maximum Loss=12031.25 Rs. Break Even Price=88.85 2)Reliance(2071.50) September Future-Lot Size 150 shares. Buy One Lot September Future @2071.50 Sell One Call Option of September Strike Price 2160@50.00 Rs. Premium Received=50*150=7500.00 Rs Maximum Profit=2160-2071.50=88.50*150==13275.00+7500.00=20775.00 Rs. Max Loss=Unlimited. Trend of Major Stocks STOCK TREND Days WeeklyTrend MonthlyTrend BHEL.NS 2 Rising Falling ICICIBANK.NS 1 Falling Falling INFOSYSTC.NS 7 Rising Rising ITC.NS 1 Falling Rising MARUTI.NS 2 Falling Rising SBIN.NS 2 Falling Falling TATASTEEL.NS 2 Falling Rising TCS.NS 6 Rising Rising Technical indicators of major Stocks MFI=Money Flow Index RSI=Relative Strength Index ADX=Directional Momentum Index STOCK CLOSE MFI-21 RSI-14 ADX-14 BHEL.NS 2330.15 61.37 59.74 14.07 ICICIBANK.NS 763.6 58.11 55.94 12.98 INFOSYSTC.NS 2190.65 64.11 67.49 38.23 ITC.NS 236.6 33.5 51.06 59.03 MARUTI.NS 1421.4 54.73 60.62 21.91 SBIN.NS 1781.75 51.14 54.48 10.84 TATASTEEL.NS 438.65 48.53 49.78 17.11 TCS.NS 540.8 60.53 60.12 22.27 Trading Idea 1)Suzlon(93.65)Buy this stock in decline and trade. 2)IDBI(102.25) Buy this stock in decline and trade. Bullet Advisory Indian Stocks-India's Top Most No.1 Best Stock Market Advice Blog,Hot Stock Tips Calls by Expert Technical Analyst Narendra Nainani of India.Most Preferred and Successful Paid Subscription Stock Tips Calls Website of India.Excellent Success Ratio of more than 90% with Superb trading ideas.Most Successful Intraday Stock Future Calls Provider Service Indian Share Market. Website http:// www.narendranainani.blogspot.com By M-+919898162770
Bullet Advice For Indian Stocks Weekly –Nifty touches 52-week high BSE Sensex (15922.30) and Nifty (4732.35) closed 4.5 % and 4.51% up respectively last week.Nifty Future September was quoting at 5.45 points premium.Nifty Call Option September 4800 was very active.Support for Sensex is at 15530 and Nifty at 4590.Resistance for Sensex is at 16340 and Nifty is at 4870.Crude oil was at 72.87 $. Tata Steel declared Q1 results which.were below market expectations.Shares of NHPC will start trading in BSE and NSE on 1st September 2009.RNRL-RIL case hearing was adjourned to 20th October instead of 1st September 2009. Unitech and Tata Steel added Open Interest in September series.Dabur and FinanTech shaded Open Interest.Huge position was build up at DLF September Call Option Strike Price 400.Good build up was also seen at Unitech September Call Option Strike Price 100.. 1)JPHYDRO(84.95) Lot Size-3125 Buy One Call Option of September Strike Price 85@ Rs.5.85 Sell One Call Option of September Strike Price 95@2.00 Rs. Premium .Paid=5.85*3125=.18281.25 Rs. Premium Received=2*3125=6250.00 Rs. Net Premium Paid=18281.25-6250= 12031.25 Rs. Maximum Profit==95-85=10*3125=31250-12031.25=19218.75 Rs. Maximum Loss=12031.25 Rs. Break Even Price=88.85 2)Reliance(2071.50) September Future-Lot Size 150 shares. Buy One Lot September Future @2071.50 Sell One Call Option of September Strike Price 2160@50.00 Rs. Premium Received=50*150=7500.00 Rs Maximum Profit=2160-2071.50=88.50*150==13275.00+7500.00=20775.00 Rs. Max Loss=Unlimited. Trend of Major Stocks STOCK TREND Days WeeklyTrend MonthlyTrend BHEL.NS 2 Rising Falling ICICIBANK.NS 1 Falling Falling INFOSYSTC.NS 7 Rising Rising ITC.NS 1 Falling Rising MARUTI.NS 2 Falling Rising SBIN.NS 2 Falling Falling TATASTEEL.NS 2 Falling Rising TCS.NS 6 Rising Rising Technical indicators of major Stocks MFI=Money Flow Index RSI=Relative Strength Index ADX=Directional Momentum Index STOCK CLOSE MFI-21 RSI-14 ADX-14 BHEL.NS 2330.15 61.37 59.74 14.07 ICICIBANK.NS 763.6 58.11 55.94 12.98 INFOSYSTC.NS 2190.65 64.11 67.49 38.23 ITC.NS 236.6 33.5 51.06 59.03 MARUTI.NS 1421.4 54.73 60.62 21.91 SBIN.NS 1781.75 51.14 54.48 10.84 TATASTEEL.NS 438.65 48.53 49.78 17.11 TCS.NS 540.8 60.53 60.12 22.27 Trading Idea 1)Suzlon(93.65)Buy this stock in decline and trade. 2)IDBI(102.25) Buy this stock in decline and trade. Bullet Advisory Indian Stocks-India's Top Most No.1 Best Stock Market Advice Blog,Hot Stock Tips Calls by Expert Technical Analyst Narendra Nainani of India.Most Preferred and Successful Paid Subscription Stock Tips Calls Website of India.Excellent Success Ratio of more than 90% with Superb trading ideas.Most Successful Intraday Stock Future Calls Provider Service Indian Share Market. Website http:// www.narendranainani.blogspot.com By M-+919898162770
NSE [National Stock Exchange]: Be an Intelligent Investor
National Stock Exchange is a Mumbai based stock exchange and is believed to be the India's largest stock exchange. In terms of daily financial return and number of trading companies listed for trades, in both equities and derivative trading, it exceed many of the Asian stock markets. The key index of the NSE is Nifty that regulates all the trades in the stock market. In broader words Nifty, an index of NSE is weighted by market capitalization and trade strategies for equities. The NSE is jointly articulated by a cluster of leading financial institutions, insurance companies and other corporate giants. However it should be noticed that the ownership and management of the NSE are managed and maintained by two different entities as well. The NSE VSAT terminals that have around 2800 in number across the country, covers 1500 cities across the nation. If talking in deep, in 2007 October, all the companies listed in the NSE have the value of $1.45 trillion as equity market capitalization. This made one of the top most and valued stock market in India. Interestingly the NSE is beats several global stock markets in the terms of trades in equities. If statistics are to be believed then the utter fact shows that NSE is the second fastest growing stock exchange at the global levels with the record growth of around 20% at gross. For best tips and tricks to make safe and secure investment you may take the suggestions and recommendations of share broking experts like MoneyControl.Com. This is the best place for getting stock news, stock quotes and other stock related information on single click. Some of the other facts that could make you interested in the NSE are listed below: • NSE is the first in stock exchange history that set up National Securities Clearing Corporation to provide a bench mark in equity and derivative trade in Indian stock markets • NSE has established national security depository limited, the first ever depository in Indian stock markets • NSE has also launched NSE-CNBC-TV 18 in association with the media giant CNBC TV-18 • NSE's trading sessions take place from 09:55am to 03:30pm on all days of the week except holidays and weekends For NSE trading tips and tricks you can simply log on to MoneyControl.com launched by the media conglomerate Network 18.
Saturday, October 17, 2009
forex dummies
If you've already read the "What is Forex?" section then you should know what Forex market is and what it is all about. If not, please, do it. There are five essential aspects of foreign currency market a beginner trader (and an old one as well) should be aware of:
Understanding and mastering these sides of trading are crucial to organize your Forex trading experience.
Forex Fundamental Analysis
Fundamental analysis is the process of market analysis which is done regarding only "real" events and macroeconomic data which is related to the traded currencies. Fundamental analysis is used not only in Forex but can be a part of any financial planning or forecasting. Concepts that are part of Forex fundamental analysis: overnight interest rates, central banks meetings and decisions, any macroeconomic news, global industrial, economical, political and weather news. Fundamental analysis is the most natural way of making Forex market forecasts. In theory, it alone should work perfectly, but in practice it is often used in pair with technical analysis. Recommended e-books on Forex fundamental analysis:
Forex Technical Analysis
Technical analysis is the process of market analysis that relies only on market data numbers - quotes, charts, simple and complex indicators, volume of supply and demand, past market data, etc. The main idea behind Forex technical analysis is the postulate of functional dependence of the future market technical data on the past market technical data. As well as with fundamental analysis, technical analysis is believed to be self-sufficient and you can use only it to successfully trade Forex. In practice, both analysis methods are used. Recommended e-books on Forex fundamental analysis are:
Money Management in Forex
Even if you master every possible method of market analysis and will make very accurate predictions for future Forex market behavior, you won't make any money without a proper money management strategy. Money management in Forex (as well as in other financial markets) is a complex set of rules which you develop to fit your own trading style and amount of money you have for trading. Money management play very important role in getting profits out of Forex; do not underestimate it. To get more information on money management you can read these books:
Forex Trading Psychology
While learning a lot about market analysis and money management is an obvious and necessary step to be a successful Forex traders, you also need to master your emotions to keep your trading performance under strict control of mind and intuition. Controlling your emotions in Forex trading is often a balancing between greed and cautiousness. Almost any known psychology practices and techniques can work for Forex traders to help them keep to their trading strategies rather to their spontaneous emotions. Problems you'll have to deal while being a professional Forex trader:
Your greed
Overtrading
Lack of discipline
Lack of confidence
Blind following others' forecasts
These are very professional books on psychology written specially for financial traders:
Forex Brokerage
Every Forex trader like any other professional needs tools to trade. One of these tools, which is vital to be in market, is a Forex broker and specifically for Internet - on-line Forex broker - a company which will provide real-time market information to trader and bring his orders to Forex market. While choosing a right Forex broker things to look for are the following:
Being a professional company you can trust
Provide you with real-time quotes
Execute your orders fast and accurately
Don't take a lot of commissions
Support the withdraw/deposit methods that you can use
For beginning Forex traders I recommend these four brokerage companies that are probably the best Forex brokers to start with:
of traders.
— a reputable MetaTrader 4 brokers, allows Islamic Forex trading accounts, while you can deposit and withdraw money via WebMoney.
— good because you can start trading Forex with as little as 10$, use MetaTrader 4 platform and the dozoen of various deposit and withdraw methods, including , e-Bullion and wire transfer.
— broker that supports MetaTrader 4 Forex trading platform and doesn't require a lot of money to start — one of the most popular and progressive brokers with MetaTrader platform and comfortable trading conditions for all kind
Understanding and mastering these sides of trading are crucial to organize your Forex trading experience.
Forex Fundamental Analysis
Fundamental analysis is the process of market analysis which is done regarding only "real" events and macroeconomic data which is related to the traded currencies. Fundamental analysis is used not only in Forex but can be a part of any financial planning or forecasting. Concepts that are part of Forex fundamental analysis: overnight interest rates, central banks meetings and decisions, any macroeconomic news, global industrial, economical, political and weather news. Fundamental analysis is the most natural way of making Forex market forecasts. In theory, it alone should work perfectly, but in practice it is often used in pair with technical analysis. Recommended e-books on Forex fundamental analysis:
Forex Technical Analysis
Technical analysis is the process of market analysis that relies only on market data numbers - quotes, charts, simple and complex indicators, volume of supply and demand, past market data, etc. The main idea behind Forex technical analysis is the postulate of functional dependence of the future market technical data on the past market technical data. As well as with fundamental analysis, technical analysis is believed to be self-sufficient and you can use only it to successfully trade Forex. In practice, both analysis methods are used. Recommended e-books on Forex fundamental analysis are:
Money Management in Forex
Even if you master every possible method of market analysis and will make very accurate predictions for future Forex market behavior, you won't make any money without a proper money management strategy. Money management in Forex (as well as in other financial markets) is a complex set of rules which you develop to fit your own trading style and amount of money you have for trading. Money management play very important role in getting profits out of Forex; do not underestimate it. To get more information on money management you can read these books:
Forex Trading Psychology
While learning a lot about market analysis and money management is an obvious and necessary step to be a successful Forex traders, you also need to master your emotions to keep your trading performance under strict control of mind and intuition. Controlling your emotions in Forex trading is often a balancing between greed and cautiousness. Almost any known psychology practices and techniques can work for Forex traders to help them keep to their trading strategies rather to their spontaneous emotions. Problems you'll have to deal while being a professional Forex trader:
Your greed
Overtrading
Lack of discipline
Lack of confidence
Blind following others' forecasts
These are very professional books on psychology written specially for financial traders:
Forex Brokerage
Every Forex trader like any other professional needs tools to trade. One of these tools, which is vital to be in market, is a Forex broker and specifically for Internet - on-line Forex broker - a company which will provide real-time market information to trader and bring his orders to Forex market. While choosing a right Forex broker things to look for are the following:
Being a professional company you can trust
Provide you with real-time quotes
Execute your orders fast and accurately
Don't take a lot of commissions
Support the withdraw/deposit methods that you can use
For beginning Forex traders I recommend these four brokerage companies that are probably the best Forex brokers to start with:
of traders.
— a reputable MetaTrader 4 brokers, allows Islamic Forex trading accounts, while you can deposit and withdraw money via WebMoney.
— good because you can start trading Forex with as little as 10$, use MetaTrader 4 platform and the dozoen of various deposit and withdraw methods, including , e-Bullion and wire transfer.
— broker that supports MetaTrader 4 Forex trading platform and doesn't require a lot of money to start — one of the most popular and progressive brokers with MetaTrader platform and comfortable trading conditions for all kind
What is Forex?
FOREX - the foreign exchange market or currency market or Forex is the market where one currency is traded for another. It is one of the largest markets in the world.
Some of the participants in this market are simply seeking to exchange a foreign currency for their own, like multinational corporations which must pay wages and other expenses in different nations than they sell products in. However, a large part of the market is made up of currency traders, who speculate on movements in exchange rates, much like others would speculate on movements of stock prices. Currency traders try to take advantage of even small fluctuations in exchange rates.
In the foreign exchange market there is little or no 'inside information'. Exchange rate fluctuations are usually caused by actual monetary flows as well as anticipations on global macroeconomic conditions. Significant news is released publicly so, at least in theory, everyone in the world receives the same news at the same time.
Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar.
Unlike stocks and futures exchange, foreign exchange is indeed an interbank, over-the-counter (OTC) market which means there is no single universal exchange for specific currency pair. The foreign exchange market operates 24 hours per day throughout the week between individuals with forex brokers, brokers with banks, and banks with banks. If the European session is ended the Asian session or US session will start, so all world currencies can be continually in trade. Traders can react to news when it breaks, rather than waiting for the market to open, as is the case with most other markets.
Average daily international foreign exchange trading volume was $1.9 trillion in April 2004 according to the BIS study.
Like any market there is a bid/offer spread (difference between buying price and selling price). On major currency crosses, the difference between the price at which a market maker will sell ("ask", or "offer") to a wholesale customer and the price at which the same market-maker will buy ("bid") from the same wholesale customer is minimal, usually only 1 or 2 pips. In the EUR/USD price of 1.4238 a pip would be the '8' at the end. So the bid/ask quote of EUR/USD might be 1.4238/1.4239.
This, of course, does not apply to retail customers. Most individual currency speculators will trade using a broker which will typically have a spread marked up to say 3-20 pips (so in our example 1.4237/1.4239 or 1.423/1.425). The broker will give their clients often huge amounts of margin, thereby facilitating clients spending more money on the bid/ask spread. The brokers are not regulated by the U.S. Securities and Exchange Commission (since they do not sell securities), so they are not bound by the same margin limits as stock brokerages. They do not typically charge margin interest, however since currency trades must be settled in 2 days, they will "resettle" open positions (again collecting the bid/ask spread).
Individual currency speculators can work during the day and trade in the evenings, taking advantage of the market's 24 hours long trading day.
Some of the participants in this market are simply seeking to exchange a foreign currency for their own, like multinational corporations which must pay wages and other expenses in different nations than they sell products in. However, a large part of the market is made up of currency traders, who speculate on movements in exchange rates, much like others would speculate on movements of stock prices. Currency traders try to take advantage of even small fluctuations in exchange rates.
In the foreign exchange market there is little or no 'inside information'. Exchange rate fluctuations are usually caused by actual monetary flows as well as anticipations on global macroeconomic conditions. Significant news is released publicly so, at least in theory, everyone in the world receives the same news at the same time.
Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar.
Unlike stocks and futures exchange, foreign exchange is indeed an interbank, over-the-counter (OTC) market which means there is no single universal exchange for specific currency pair. The foreign exchange market operates 24 hours per day throughout the week between individuals with forex brokers, brokers with banks, and banks with banks. If the European session is ended the Asian session or US session will start, so all world currencies can be continually in trade. Traders can react to news when it breaks, rather than waiting for the market to open, as is the case with most other markets.
Average daily international foreign exchange trading volume was $1.9 trillion in April 2004 according to the BIS study.
Like any market there is a bid/offer spread (difference between buying price and selling price). On major currency crosses, the difference between the price at which a market maker will sell ("ask", or "offer") to a wholesale customer and the price at which the same market-maker will buy ("bid") from the same wholesale customer is minimal, usually only 1 or 2 pips. In the EUR/USD price of 1.4238 a pip would be the '8' at the end. So the bid/ask quote of EUR/USD might be 1.4238/1.4239.
This, of course, does not apply to retail customers. Most individual currency speculators will trade using a broker which will typically have a spread marked up to say 3-20 pips (so in our example 1.4237/1.4239 or 1.423/1.425). The broker will give their clients often huge amounts of margin, thereby facilitating clients spending more money on the bid/ask spread. The brokers are not regulated by the U.S. Securities and Exchange Commission (since they do not sell securities), so they are not bound by the same margin limits as stock brokerages. They do not typically charge margin interest, however since currency trades must be settled in 2 days, they will "resettle" open positions (again collecting the bid/ask spread).
Individual currency speculators can work during the day and trade in the evenings, taking advantage of the market's 24 hours long trading day.
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