Foreign Exchange Margin Trading

1、Foreign Exchange Margin Trading        Abstract: The foreign investment in the existing personal investment needs can not meet the circumstances, the personal foreign exchange margin trading in China has developed rapidly, but because of the current national l

2、aws and regulation is imperfect, foreign exchange margin trading is still in the blind stage of development, is faced with many practical problems.         Key words: foreign exchange bonds; leverage benefits         

3、60;          In a variety of investment projects, the most fair and can be considered the most attractive foreign exchange margin trading. With the rapid development of China's foreign exchange market, a new round of foreign exchange margin trading bl

4、ow against our faces, the major domestic commercial banks began to get involved to carry out foreign exchange margin business.                    1, what is the foreign exchange margin trading and its character

5、istics                    Foreign Exchange Margin Trading, also known spot foreign exchange trading contracts, deposit transactions, such as virtual trading means, from the frequent fluctuations in the exchange

6、 rate gains access to the exchange rate spread. Customers can freely choose to do more, or a short foreign exchange, currency trading, and long-short funds and direction from their accounts currency restrictions, trade more freely. Foreign exchange margin trading is a leverage effect, the actual tra

7、nsaction amount based on the original a few times or even hundred times larger trading margin foreign exchange transactions should be known as the spot foreign exchange margin trading. Margin trading is central to its leverage to make it in with revenue, while amplifying effect, the risk is also syn

8、chronized to enlarge. Recently emerging in the domestic market, foreign exchange margin trading can also be referred to as virtual currency trading, it is relative to the traditional firm offer of foreign exchange transactions, is similar to the futures as an investment tool for investors who use a

9、certain percentage of the money - ' margin ', you can engage in several times the amount of foreign exchange investment margin. Investors use the related role of the economic leverage to broker investment guarantees provided by the trust to carry out foreign exchange transactions, their cred

10、it will be extended several times so that it can operate multiple transactions is equivalent to the amount of funds deposited in a rapidly changing and out of the foreign exchange market trading, as a general grasp of international capitalists and the opportunity to make the exchange differences. In

11、vestors in the profit and loss occurs, the financial institutions will automatically transfer earnings from the account or to deduct the amount of loss. Investors can set up the system through pre-orders and stop-loss orders to limit investment risk control. Margin trading can be described as one of

12、 the most attractive investment is spread around the world has long been the main form of foreign exchange investment.                    Second, our personal foreign exchange margin trading and risk facing the

13、 real problems                    In 1994, the State Administration of Foreign Exchange and other departments on non-domestic institutions and organizations involved in foreign exchange margin trading to break

14、the ban has been substantial. However, because our territory and the lack of legal basis for foreign exchange margin trading, transaction risk control and regulatory measures is not yet complete. So now my personal practice outside the margin trading is still not standardized, there are many problem

15、s:         1. Good and bad dealers, regardless of credit, information asymmetries         Advent of the Internet age, in the policy of the wall on top of a bridge. Foreign Trade Department as long as the buying or rentin

16、g a server, you can visit our country's small and medium investors in their website, download trading software to carry out foreign exchange margin trading. Some of the more standardized trading companies, have to follow the principle of territorial jurisdiction, to provide customers with regula

17、tory authorities issued by a membership number. However, even if the case, customers want a better understanding of offshore trading companies related to financial condition, risk management measures, registration information is not easy, unless some major non-compliance records and the disclosure o

18、f the host country regulatory authorities         2. Account funds have been controlled, endangering the financial security of         Engaged in a personal exchange margin trading, individual investors must first open a

19、 margin account, deposit guarantee funds for Chao Hui, transactions conducted through the network platform, trade associations, according to investors, the transaction application and related materials to the investors in a particular bank to open account. These far outside the capital account, whet

20、her it is individual accounts, or with people sharing one account, the actual right to control their capital wholly owned by foreign traders of all. Individual investors can import margin accounts, margin calls, if the profit, in principle, it can allocate funds; but Chaohui funds remitted through a

21、 designated account, the relationship between property ownership will change, dealers have the right to the account management of funds and final disposal of the rights of expenditure can be carried out without interference. The absence of any supervision and restriction on foreign traders funds are

22、 apt to deal with credit risks, thereby endangering the safety of funds.         3. Highly leveraged risk         Each investment contains risks, but because of foreign exchange margin trading to the high capital Leverag

23、e mode, to enlarge the amount of loss. Especially in the case of the use of high leverage, even when the opposite position with your small change will bring about huge losses, even including all of the accounts of funds. Therefore, for this speculative foreign exchange transactions must be risk capi

24、tal funds; In other words, these funds even if the total loss of your life and it will not cause significant effect on the financial result. Reposted elsewhere in the paper for free download http:/         4. Vast market risk      

25、0;  Foreign exchange market, a 24-hour operation with no price limit, when the volatile and may even in a day on weekdays has completed a few months in order to achieve range of motion. Of foreign exchange movements affected by many factors, no one can accurately determine the exchange rat

26、e trend. In the holding position, any unexpected exchange rate fluctuations are likely to result in substantial loss of funds or even completely disappear.         5. Opaque inner workings of traders, trading of unequal status      

27、60;  In offshore trading companies or banks in the leading foreign exchange margin trading, individual investors are always at a disadvantage, can only passively accept the trading rules of the game. In the face of changing market, trading company or bank will take a certain degree of inte

28、rnal operations and technical means, the market risk onto their own customer base, to control their own profit levels. For example, when major international events or in the international market price volatility, they are likely to take a particular technical means, so that the cost of individual in

29、vestors in a limited range can not connect to the trading system, or simply limit the rapid trading to individual investors under the alone to control the risks; trading system may even be deliberately caused the delay, using the time difference, short devalued currency, to shift the risks of gambli

30、ng investors. In particular, some irregularities in the agency no orders to overseas dealers, but rather to take a malicious internal hedging operations. At this time, few investors profit book into a temporary number, while the loss of universality has made many investors to the agent to pay the ne

31、ver-ending bond investors to become long-standing criticism of the main reasons for margin trading.                    Third, foreign exchange margin trading think twice before you leap     

32、               Foreign exchange margin trading is a double-edged sword, margin leverage will lead to a loss of investors to expand the number of times, or even a hundredfold, minor fluctuations in any market could result in all of

33、 the principal amount of the loss. Therefore, investing in foreign exchange margin trading must think twice before they act. The risk of stock market investment has to be cautious while foreign exchange margin trading has gradually sunshine, though the risk characteristics of its own but also have t

34、he deserves the attention of investors. Margin, after all, is a high risk of financial trading tools, its performance makes high-leveraged foreign exchange fluctuation risk is magnified several times or even several times. Frequent fluctuations in the foreign exchange market, many international fina

35、ncial institutions and funds to participate, changes in national economic policy at any time, all kinds of unexpected factors that have occurred. All these factors may lead to volatile exchange rate at the slightest mistake could bring about huge losses. Therefore, the investors involved in the fore

36、ign exchange transactions must have a certain degree of risk tolerance. Bank staff said that although the operation, the cross-line will provide some analysis of data and operational recommendations, but the ultimate power to determine the customer's hands, but many factors that affect the exchange rate is also very complex, political, economic, oil pric