When I hear the term foreign currency
perhaps many of us who
imagine it like
transact buy or sell dollars
in a money-changer, it's just this
through the internet!
Though the situation is much different. if
we deal in money changer
the physical exchange of money
between the money-changer with its customers.
In other words there is a process
'Delivery' and not to permit
'Leverage'.
This is different from online forex trading
we will learn in this book.
In the forex transactions on the Internet,
transactions that never occurred
manifested in physical form as
the transaction will be closed
with an opposite transaction to
take advantage.
Suppose someone makes a transaction
purchase 1 lot of EUR / USD, the person
never received 100,000 Euros in
physical form and also never
submit payment in the form of CAD.
In case this is done only
make a 'contract' to buy EUR / USD as much as
1 lot. The contract will be
liquidated after the price goes up again
and the expected profit achieved.
That is if the value of EUR / USD will go up ...
but what if it turns out EUR / USD
declined and the value of a 'contract' that
be reduced?
This is where it takes the name
'Margin', ie a kind of security deposit
given to the broker to
compensate for the value of the contract if
the loss.
Selasa, 06 Desember 2011
Margin and Leverage
