The popularity of foreign exchange and futures in China is only second to that of stocks. Many investors who are not interested in stocks are obsessed with the choice of foreign exchange and futures. Which one is more risky?
Below let FinanceWord small make up for you to introduce.
First, foreign exchange and futures investment which good?
Compared with futures, foreign exchange investment shows great differences in four aspects and has obvious advantages. The details are as follows.
1. With higher capital liquidity, the daily trading volume of spot foreign exchange (spot) market is as high as $1.4 trillion, which makes the foreign exchange market the largest and most liquid financial market in the world. However, the size of other financial markets is dwarfed by the trading volume and foreign exchange market.
Investors get a clearer idea of the extent of liquidity if they use the futures market, which trades just $30bn a day.
The foreign exchange market is always liquid, and investors can trade or stop losses at any time.
The foreign exchange market is a 24-hour market where investors can react to any situation anytime, anywhere.
Investors can also flexibly plan their entry or exit time.
The following is an example of foreign exchange investment opportunities 24 hours a day based on Eastern time, as shown in Figure 1-1.
Figure 1-1 The Foreign Exchange Market is a continuous market Example 3. Quality and Speed of Transactions Each trade in the futures market has a different date, a different price, or a different contract content.
Every futures trader knows from experience that it can take up to half an hour for a futures deal to be completed, and it is often far from the final price.
Despite the aid of electronic transactions and the guarantee of limited transactions, market order transactions are still quite volatile.
Foreign exchange dealers provide a stable quotation and an instant transaction system. Investors can use the instant market quotation to make a deal.
That way, even in the busiest times of the market, there will be no failure to close the deal.
It can be seen that there are obvious differences between the foreign exchange market and the futures market in terms of the quality and speed of transaction, as shown in Figure 1-2.
Figure 1-2 Differences between the quality and speed of transactions in the Foreign Exchange market and the futures market Commission-free Foreign Exchange trading In the futures market, in addition to the price difference, investors have to pay additional commission or commission fees.
All financial goods have a buy price and a sell price, and the difference between the buy and sell prices is defined as the spread, or the cost of the transaction.
To this day, unreasonable price differentials still exist in futures markets because of a lack of transparency.
Investors can now gauge the depth of the market and the true cost of trading by looking at the bid and offer prices displayed on online trading platforms.
Currency spreads are much lower than futures spreads, especially after hours.
Because futures investors are vulnerable to low liquidity, and suffer big losses.
Two, foreign exchange and futures which risk is big?
Foreign exchange and futures have their own trading characteristics, so it can be said that the risks of foreign exchange and futures trading are quite large. The main differences between foreign exchange and futures are as follows: First, foreign exchange is spot trading, investors can hold it indefinitely as long as they want, while futures has a specific delivery date. If investors do not close their positions in the trading day, they will be forced to close out.
Number two.
Foreign exchange can be traded 24 hours a day, the chance of short jumping is not much, and if it is a product, it is not easy to trade because the market is closed every day, there are often short jumping.
Third, at present, there are only futures exchanges in China, but no foreign exchange trading platform. If investors want to conduct foreign exchange trading, they must choose the platform strictly. If they are not careful, they may be cheated.
Conclusion: The above is the author collated about futures or foreign exchange better?
Futures, and foreign exchange which of them is more suitable for investment?
Engaged in the financial industry for many years, if you have any questions or questions small.
