FOREIGN EXCHANGE
Genuine Trading Solutions provides Foreign Exchange ("Fx") services and trading for two distinct types of
clientele. As the term Foreign Exchange implies, our institutional abilities have allowed us to provide you direct floor access to the worlds largest currency and Fx
market. The professionals at Genuine Trading Solutions are able to provide physical conversion and trade execution to more than 40 different currencies worldwide.
CASH FOREX VERSUS CURRENCY FUTURES
As a potential investor it is important for you to understand the differences between cash Fx and currency futures. In currency futures, the contract size is predetermined.
Futures traders exercise leverage by utilizing Margin to control a futures contract.
(Margin is money deposited by both the buyer and the seller to assure integrity of the contract.)
But with liquidity in mind, the futures market
may seem limiting because the data flow comes to a stop at the
end of the business day (just as it does with the stock market)
thus disrupting your perception of the market. For some traders,
this could lead to a certain level of anxiety. If important
data comes in from England or Japan while the U.S. futures markets
is closed, the next day's opening could be a wild ride.
In contrast to the futures market, the spot
Fx market is a 24-hour, continuous currency exchange that never
closes. There are dealers in every major time zone, in every
major dealing center (i.e., London, New York, Tokyo, Hong Kong,
Sydney, etc.) willing to quote two-way markets. The size of
this market, over one trillion dollars per day gives you near
perfect liquidity. Because of the advantages of sheer volume
and daily volatility, the excitement of this market is unparalleled.
From 1971 until recent years the virtual owners
of this market were the banks, multinational corporations and
large brokerage firms. If an individual wanted to invest in
this market, he could invest with a bank with a one million
dollar cash deposit backed by the requirement of a 5-10 million
dollar net worth. A slightly better option was provided by the
brokerage firms, which asked a lower minimum deposit on average
of a quarter million dollars.
But now the Fx market has been opened
up to Individual investors. Unlike the huge
sums of money previously required by
the banks and brokerage firms, com-
paratively far lower margin require-
ments are finally available that now
allows virtually any individual to
trade along with the professionals
and institutions. In addition,
individual investors have the
opportunity to take advantage of
the growing boom in computer and
communication technologies that has made
this market accessible in ways previously exclusive only to large players.
WHY IS THE SPOT CURRENCY MARKET ATTRACTIVE TO INVESTORS?
Professional investors for individual accounts have dramatically increased their level of participation in the cash Fx
market in recent years. Add to this the growing use of cash Fx by individual investors and you have a rapidly growing
investment arena. The following summarizes the many reasons professional investors have flocked to this market.
Liquidity This market can absorb trading volumes and per trade sizes that dwarf the capacity of any other market.
On the simplest level, liquidity is a powerful attraction to any investor as it suggests the freedom to open or close a position
at will.
HOW CAN I PARTICIPATE IN THE SPOT CURRENCY MARKET AS A TRADER?
Now the Fx market has been opened up to Individual investors. Unlike the huge sums of money previously required by the banks
and brokerage firms, account sizes of US$10,000 are finally available that now allow virtually any individual to trade along
with professionals and institutions.
