Forex trading course at forex school.

Jan 5
08:17

2011

Michael Wisniewski

Michael Wisniewski

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 Forex as OTC market*


Forex is abbreviation from foreign exchange. That's how exactly this market started to function. I'm not sure how 'forex' definition look like in dictionary at this particular moment,Forex trading course at forex school. Articles but I will describe how it is in practice. Over The Counter (OTC) market means that most of transactions aren't centralized in one place. Practically it means that if we are buying contracts with different brokers, it is not exactly the same product issued with one exchange. For stocks purchases there is always an exchange responsible for it. Here on forex it is a little different. There are many brokers that are responsible for exchanging or providing buy/sell of contracts without standarization with any exchange. It means it is up to broker if he will really execute your order or just fill your account after the trade. Recently, especially in last couple of years, forex market is evolving quickly. Between most known currencies now you can find also commodities, interest rates, some stocks, bonds and other derivatives between OTC opportunities. It means that forex has changed into vehicle to bet on many different instruments, not only currencies. Most likely in few years you will meet more instruments on some platform that you possibly use right now.

Futures contract are different then SPOT and CFD's derivatives mentioned above. Futures seem to be more secure and standardized. This kind of trading goes thru the exchange or clearer that is responsible for delivering (if necessary) – etc. www.cmegroup.com . It is more similar to buying something like stocks with official stock-exchange and might be also more secure then trading with some unknown broker.


*This article is an object of author's experience and speculation

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