When trading foreign exchange, you are quoted a dealing spread offering you a buying and a selling level for your trade. Once you accept the offered price and receive confirmation from our dealers, the trade is done. There is no need to call an exchange floor. There are no other time-consuming delays. This is possible due to live streaming prices, which are also a great advantage in times of fast-moving markets: You can see where the market is trading and you know whether your orders are filled or not.
The dealing spread is typically 3-5 points in normal market conditions. This means that you can sell US dollars against the euro at 1.7780 and buy at 1.7785. There are no further costs, commissions or exchange fees.
This ensures that you can get in and out of your trades at very low slippage and many traders are therefore active intra-day traders, given that a typical day in USDEUR presents price swings of 150-200 points.
Thursday, April 23, 2009
Base Currency and Variable Currency
When you trade, you will always trade a combination of two currencies. For example, you will buy US dollars and sell euro. Or buy euro and sell Japanese yen, or any other combination of dozens of widely traded currencies. But there is always a long (bought) and a short (sold) side to a trade, which means that you are speculating on the prospect of one of the currencies strengthening in relation to the other.
The trade currency is normally, but not always, the currency with the highest value. When trading US dollars against Singapore dollars, the normal way to trade is buying or selling a fixed amount of US dollars, i.e. USD 1,000,000. When closing the position, the opposite trade is done, again USD 1,000,000. The profit or loss will be apparent in the change of the amount of SGD credited and debited for the two transactions. In other words, your profit or loss will be denominated in SGD, which is known as the price currency. As part of our service, Saxo Bank will automatically exchange your profits and losses into your base currency if you require this.
The trade currency is normally, but not always, the currency with the highest value. When trading US dollars against Singapore dollars, the normal way to trade is buying or selling a fixed amount of US dollars, i.e. USD 1,000,000. When closing the position, the opposite trade is done, again USD 1,000,000. The profit or loss will be apparent in the change of the amount of SGD credited and debited for the two transactions. In other words, your profit or loss will be denominated in SGD, which is known as the price currency. As part of our service, Saxo Bank will automatically exchange your profits and losses into your base currency if you require this.
Term Securities Lending Facility Options Program (TOP) Terms and Conditions
The System Open Market Account (SOMA) Term Securities Lending Facility Options Program (TOP) offers options to draw upon loans of U.S. Treasury securities from the SOMA portfolio in accordance with the program terms and conditions set forth below and in the Term Securities Lending Facility (TSLF) terms and conditions.All terms and conditions are subject to change.
Term Securities Lending Facility
In addition to the daily Securities Lending program, the Bank provides Treasury general collateral financing through the Term Securities Lending Facility (TSLF) and TSLF Options Program (TOP) to promote liquidity in Treasury and other collateral markets and thus foster the functioning of financial markets more generally. Weekly TSLF auctions offer Treasury securities held by the System Open Market Account (SOMA) for loan over a one-month term against program-eligible general collateral. The TOP offers options to borrow Treasury securities against program-eligible collateral over a short term that crosses key financing dates. Securities loans and options on securities loans are awarded to primary dealers based on competitive single-price auctions.
Foreign Exchange
The Federal Reserve Bank of New York carries out foreign exchange-related activities on behalf of the Federal Reserve System and the U.S. Treasury. In this capacity, the Bank monitors and analyzes global financial market developments, manages the U.S. foreign currency reserves, and from time to time intervenes in the foreign exchange market. The Bank also executes foreign exchange transactions on behalf of customers.
FOREIGN POLICY
Pakistan Table of Contents
Pakistan's foreign policy has been marked by a complex balancing process--the result of its history, religious heritage, and geographic position. The primary objective of that policy has been to preserve Pakistan's territorial integrity and security, which have been in jeopardy since the state's inception.
A new era began with the partition of British India in 1947 and the formation of two independent, sovereign states--India and Pakistan. Both nations searched for their place in the world order and aspired to leadership roles beyond the subcontinent.
India and Pakistan became adversaries at independence and have so remained. The two countries fought each other shortly after partition, in 1965, and in 1971, causing the dismemberment of Pakistan and the creation of still another new sovereign entity--Bangladesh. India-Pakistan rivalry intensified rather than diminished after the Cold War, and the Kashmir territorial dispute remains dangerous and recurrent.
Pakistan sought security through outside alliances. The new nation painstakingly worked on building a relationship with the United States, in which the obligations of both sides were clearly defined. The Western-oriented, anticommunist treaties and alliances Pakistan joined became an important part of its foreign policy. Pakistan also saw itself as a vanguard of independent Muslim states.
Foreign Relations with ...
Pakistan's foreign policy has been marked by a complex balancing process--the result of its history, religious heritage, and geographic position. The primary objective of that policy has been to preserve Pakistan's territorial integrity and security, which have been in jeopardy since the state's inception.
A new era began with the partition of British India in 1947 and the formation of two independent, sovereign states--India and Pakistan. Both nations searched for their place in the world order and aspired to leadership roles beyond the subcontinent.
India and Pakistan became adversaries at independence and have so remained. The two countries fought each other shortly after partition, in 1965, and in 1971, causing the dismemberment of Pakistan and the creation of still another new sovereign entity--Bangladesh. India-Pakistan rivalry intensified rather than diminished after the Cold War, and the Kashmir territorial dispute remains dangerous and recurrent.
Pakistan sought security through outside alliances. The new nation painstakingly worked on building a relationship with the United States, in which the obligations of both sides were clearly defined. The Western-oriented, anticommunist treaties and alliances Pakistan joined became an important part of its foreign policy. Pakistan also saw itself as a vanguard of independent Muslim states.
Foreign Relations with ...
Understanding How and Why OTC Forex Markets Work
Understanding How and Why OTC Forex Markets Work
Trading the OTC (over the counter) currency markets offers an opportunity to hedge stock and bond investing, but really is more of a traded market following the ebbs and flows of global commerce than it is an investment arena to plan retirement from. Getting to know six major currency pairs would seem an easy task when compared to the tens of thousands of stock and bond options available for analysis. But it seems that it is not necessarily how each currency will move against the Usd; more importantly it seems is knowing when the market will have momentum is key to not getting caught in reversals and snap-backs whilst leveraged at 100:1.
Setting times to trade really does make a lot of sense with the near-term view that forex valuations carry. "There are three main forex moving times that regularly garner attention, and therefore offer an ability to move prices with momentum" TheLFB-Forex.com trade team explained. "They are the 2am EDT German Dax futures market, the 6am EDT London gold/oil fixings and LIBOR rates being set, and the 11am EDT European market close. Outside of that, the return from lunch in Japan and the closing of the NYMEX markets really are the only other times that prices move substantially and then hold".
"At the end of the U.S. session the pattern is for Asian markets to try and initially reverse U.S. trade direction, although the lack of volume tends to soon allow pairs to find and hold support areas. The European markets tend to move in the same direction as Asian trade, and then U.S. based futures traders try to reverse things and re-set their books as the London fixings are placed between 5-6am EDT" said TheLFB-Forex.com Trade Team members.
At 10:30am in London telephone bids at the gold and oil fixings take place, something that sets the morning clearing prices for bullion and crude dealers that are then adjust once again at 3.30pm local time. At 11am each day in London the British Bankers Association set the inter-bank LIBOR rates, something that sets the tone for lending rates between financial market participants.
The London fixings tend to force Chicago based futures markets into a re-alignment program at 06:00 EDT that replicates the newly set fair values on oil, gold, and lending rates, and by default tends to then impact Usd based currency values. "It is rare for the U.S. not to push back each morning and reverse the pattern of forex trade that came before, especially if a sizeable move has happened in overnight forex trade" TheLFB-Forex.com Trade Team said.
"Forex traders really need to know what is going to trigger the technical set-ups, and therefore be prepared to ride momentum while it lasts. In the trading forex arena there are different things to look for than in the equity and bond investment world; a week in forex is like a month’s worth of stock trade" they said.
"There are three or four times in a 24 hour period that forex traders are well advised to switch tack, lock in profit, and/or reverse near-term directional thinking" the team said. "The European and NYMEX close are the U.S. based times to get through, because then, maybe, the equity markets can reveal where they really want to go. Traders looking for moves outside of 06:00 EDT, 11:00 EDT, and maybe 14:30 EDT, may just find themselves sitting and waiting, wondering why they just bought the high of the day that then reversed".
As the global economy travels through the contraction phase of its business cycle the leaning is towards S&P futures trade to confirm sentiment. "The speculators are never too far away from the S&P in times of fear; either selling into the fear of loss, or buying into the fear of missing profits. That is the reason for so much near-term volatility, and that is how things will stay until signs of GDP expansion are seen globally".
Until then it seems that the 23 hour a day S&P futures trade will set up the eight hour S&P cash market in the U.S. and by default will set up the Usd direction. Long equities tend to lead to short dollars, and vice versa. "Trends, it seems, will come only when the two get aligned" TheLFB team said..
Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.thelfb-forex.com/
TheLFB Risk Disclaimer can be found at http://www.thelfb-forex.com/content.aspx?id=174.
The Copying, Broadcast, Republication or Redistribution of TheLFB Content is Expressly Prohibited Without the Prior Written Consent of LFB Services, LLC.
Trading the OTC (over the counter) currency markets offers an opportunity to hedge stock and bond investing, but really is more of a traded market following the ebbs and flows of global commerce than it is an investment arena to plan retirement from. Getting to know six major currency pairs would seem an easy task when compared to the tens of thousands of stock and bond options available for analysis. But it seems that it is not necessarily how each currency will move against the Usd; more importantly it seems is knowing when the market will have momentum is key to not getting caught in reversals and snap-backs whilst leveraged at 100:1.
Setting times to trade really does make a lot of sense with the near-term view that forex valuations carry. "There are three main forex moving times that regularly garner attention, and therefore offer an ability to move prices with momentum" TheLFB-Forex.com trade team explained. "They are the 2am EDT German Dax futures market, the 6am EDT London gold/oil fixings and LIBOR rates being set, and the 11am EDT European market close. Outside of that, the return from lunch in Japan and the closing of the NYMEX markets really are the only other times that prices move substantially and then hold".
"At the end of the U.S. session the pattern is for Asian markets to try and initially reverse U.S. trade direction, although the lack of volume tends to soon allow pairs to find and hold support areas. The European markets tend to move in the same direction as Asian trade, and then U.S. based futures traders try to reverse things and re-set their books as the London fixings are placed between 5-6am EDT" said TheLFB-Forex.com Trade Team members.
At 10:30am in London telephone bids at the gold and oil fixings take place, something that sets the morning clearing prices for bullion and crude dealers that are then adjust once again at 3.30pm local time. At 11am each day in London the British Bankers Association set the inter-bank LIBOR rates, something that sets the tone for lending rates between financial market participants.
The London fixings tend to force Chicago based futures markets into a re-alignment program at 06:00 EDT that replicates the newly set fair values on oil, gold, and lending rates, and by default tends to then impact Usd based currency values. "It is rare for the U.S. not to push back each morning and reverse the pattern of forex trade that came before, especially if a sizeable move has happened in overnight forex trade" TheLFB-Forex.com Trade Team said.
"Forex traders really need to know what is going to trigger the technical set-ups, and therefore be prepared to ride momentum while it lasts. In the trading forex arena there are different things to look for than in the equity and bond investment world; a week in forex is like a month’s worth of stock trade" they said.
"There are three or four times in a 24 hour period that forex traders are well advised to switch tack, lock in profit, and/or reverse near-term directional thinking" the team said. "The European and NYMEX close are the U.S. based times to get through, because then, maybe, the equity markets can reveal where they really want to go. Traders looking for moves outside of 06:00 EDT, 11:00 EDT, and maybe 14:30 EDT, may just find themselves sitting and waiting, wondering why they just bought the high of the day that then reversed".
As the global economy travels through the contraction phase of its business cycle the leaning is towards S&P futures trade to confirm sentiment. "The speculators are never too far away from the S&P in times of fear; either selling into the fear of loss, or buying into the fear of missing profits. That is the reason for so much near-term volatility, and that is how things will stay until signs of GDP expansion are seen globally".
Until then it seems that the 23 hour a day S&P futures trade will set up the eight hour S&P cash market in the U.S. and by default will set up the Usd direction. Long equities tend to lead to short dollars, and vice versa. "Trends, it seems, will come only when the two get aligned" TheLFB team said..
Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.thelfb-forex.com/
TheLFB Risk Disclaimer can be found at http://www.thelfb-forex.com/content.aspx?id=174.
The Copying, Broadcast, Republication or Redistribution of TheLFB Content is Expressly Prohibited Without the Prior Written Consent of LFB Services, LLC.
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