Derivatives are instruments and typically used by investors for speculation and arbitrage or hedging against possible future changes. Generally, they took a form of contract under which parties agreed on payments, dates, amounts, obligations between the parties.
The most commonly used foreign exchange derivatives are forward contracts, future contracts, options and swaps. I will make a brief introduction for each derivative with example below.
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This post will accumulate the basic features of foreign exchange markets also known as Forex or FX. Let’s start from the definition: What is Forex? It’s a largest and most liquid market in the world where currencies are traded.
In other words, it’s a place where everyone can make money in different ways. For example, the most obvious way is to buy and sell currency or you can work in a big investment bank as a trader or software engineer. Continue reading Basic Things To Know About Forex