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Foreign Exchange Services
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In a perfect world, we would all want for nothing. Diseases would be cured, hunger would be abolished, peace would be resolved, and we would all live in comfort, with every desire satisfied, and every need identified.
However, we are still a long ways away from this utopian future, and alas, we must all face reality and deal with the necessities of our basic human existence. And so, we must work in order to eat, shelter, and protect ourselves and our families. But there are times where this can prove to be a challenge, for fate intertwines with our goals, and we are left without sustainable means, even if only for a short period of time. We can ill afford to risk meeting our basic needs, and so society has devised several complicated methods for us to translate our efforts into tangible services and goods.
What this all means really is that sometimes we try to earn a living and outside forces interfere with that ability, whether through natural influences or human interference, and we are faced with situations that interrupt our work and we must find other resolutions in order to provide for ourselves and our families. We are forced to rely on other agencies (a bank loan, a payday advance, or liquidation of assets), in order to continue receiving the essentials that enable us to exist.
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Foreign Exchange Market
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Unlike a stock market, where all participants have access to the same prices, the foreign exchange (forex) market is divided into levels of access. At the top is the inter-bank market, which is made up of the largest investment banking firms. Within the inter-bank market, spreads, which are the difference between the bid and ask prices, are razor sharp and usually unavailable, and not known to players outside the inner circle. As you descend the levels of access, the difference between the bid and ask prices widens (from 0-1 pip to 1-2 pips only for major currencies like the Euro). This is due to volume.
If a trader can guarantee large numbers of transactions for large amounts, they can demand a smaller difference between the bid and ask price, which is referred to as a better spread. The levels of access that make up the forex market are determined by the size of the “line” (the amount of money with which they are trading). The top-tier inter-bank market accounts for 53% of all transactions. After that there are usually smaller investment banks, followed by large multi-national corporations (which need to hedge risk and pay employees in different countries), large hedge funds, and even some of the retail forex market makers.
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