Forex stands for foreign exchange market, with a variety of participants being involved in financial transactions. Among them are banks, central banks, and commercial companies which trade currencies in the financial markets. Other players include hedge funds, retail foreign exchange traders, and investment management firms.
The top banks participate in the currency market daily, and only part of the trading takes place on behalf of customers. The bulk of trading, however, takes place for the benefit of banks' own accounts. Central banks fall into another group of participants in that they aim to control interest rates, inflation, and the money supply. For these reasons, central banks have official and unofficial rates for their currencies. Stabilizing the market is one of the main goals of central banks. They do this by using considerable amounts from their foreign exchange reserves. Generally, central banks have a major role to play on the currency markets in London, Tokyo, and New York. Other forex locations exist as well, but these are considered the most important ones.
Retail foreign exchange traders fall into another category of participants that use retail forex platforms and participate on the foreign exchange market indirectly, using the services of brokers and banks. The share of retail foreign exchange traders is insignificant, making for just 2 percent of the whole volume. The National Futures Association has announced that the volume of retail forex trading has increased considerably, especially over the last couple of years. At the same time, forex fraud is also a more prominent phenomenon. Retail forex traders work with two main types of trading desks. One of them is the non-dealing desk, with trading in the hands of the proprietary. Foreign exchange trading takes place on this desk. The dealing or trading desk is the second desk, and off-exchange trading is carried out there.
Investment management firms are another player on the foreign exchange market. Endowments, pension funds, and other entities have large accounts, which are managed by investment management firms. Trading on the currency market is done by carrying out transactions in different foreign securities. Currency overlay operations are also carried out to generate profits and reduce risks.
Hedge funds are privately managed funds with an aggressive approach, which employ sophisticated strategies to generate profits. Hedge funds employ advanced strategies, among which short, long, derivative, and leveraged positions in the international and domestic markets. Since the 1990s, hedge funds have been known for aggressive currency speculation. Controlling billions in equity, hedge funds can easily play against the efforts of any central bank to support certain currency. It should be noted that more than 70 percent of transactions on the currency market are speculative.
Finally, commercial companies also trade on the currency market with the aim of increasing the holding of stockholders. Given that commercial companies trade a relatively small volume, unlike speculators and banks, their transactions do not have much of a short-term impact on exchange rates. At the same time, currency rates are influenced by cash flows in the long run.
Finding information about trading can be a breeze, just visit forex brokers website.
Wednesday, October 26, 2011
Wednesday, October 12, 2011
Types Of Savings Accounts
Savings accounts represent accounts at retail banks, with the major benefit for depositors being interest paid. The money in a savings account cannot be used directly although withdrawals are not limited. Clients can withdraw money from their account, but in some cases, they are costly. Applicable fees are usually higher than those that go with demand deposits.
Generally, there are two types of accounts, personal savings accounts and business savings accounts. The first variety is suited to the needs of individual clients while the second is a good option for business owners. One or more depositors can hold a personal savings account, accessing it at a time of their convenience, but not all banks allow this. Many such accounts go with a minimum balance requirement and fees are thus avoided.
Personal bank accounts can use a passbook or register to record all interest credits, deposits, and withdrawals. Banking institutions issue statements semi-annually, quarterly, or monthly, providing depositors with a record of transactions within the specified period of time.
Another variation of the savings account is the money market account. This type of account is featured with checks which can be used monthly. Money market accounts are offered by credit unions and banks much like normal savings accounts. Customers who choose this account type enjoy higher interest, but there is usually a higher minimum balance requirement. The minimum balance can be as high as $1,000 - $2,500. The minimum balance is lower with regular savings accounts, between $25 and $100. Banks make an exception for children, as the savings account is often the first bank account opened for them. Most financial establishments are quite accommodating to children, as this is one way to develop their future customer base.
Depositors who open a personal savings account can make three to six withdrawals and white up to three checks a month.
Some financial establishments also offer online-only savings accounts, along with standard savings calculators. These accounts are offered with high interest rates, along with more security restrictions. While banks offer high interest rates with these accounts, they make profits by attracting more deposits. Regardless of the fact that deposits are liabilities for financial institutions, and depositors can withdraw them any time, deposits are used to make more loans. Loans are assets for banks because the interest they charge on loans generates profit.
In what cases are savings accounts a good choice? Some bank customers prefer interest checking accounts, which pay lower interest compared to a savings account. At the same time, a savings account is a better option if you won't need the money over a period of several months. If you will not be able to maintain the minimum balance, you should not open a savings account because you will not benefit from the interest earned.
When you choose a savings account, you should take several factors into account. Ask about the fees and service charges first. Second, find out the minimum balance requirement, as you will be charged a fee if you do not keep certain money in your savings account. Lastly, you should check the interest rate, as this is how you profit from holding a savings account.
This informational resource, will help you learn more about savings accounts in Canada.
Generally, there are two types of accounts, personal savings accounts and business savings accounts. The first variety is suited to the needs of individual clients while the second is a good option for business owners. One or more depositors can hold a personal savings account, accessing it at a time of their convenience, but not all banks allow this. Many such accounts go with a minimum balance requirement and fees are thus avoided.
Personal bank accounts can use a passbook or register to record all interest credits, deposits, and withdrawals. Banking institutions issue statements semi-annually, quarterly, or monthly, providing depositors with a record of transactions within the specified period of time.
Another variation of the savings account is the money market account. This type of account is featured with checks which can be used monthly. Money market accounts are offered by credit unions and banks much like normal savings accounts. Customers who choose this account type enjoy higher interest, but there is usually a higher minimum balance requirement. The minimum balance can be as high as $1,000 - $2,500. The minimum balance is lower with regular savings accounts, between $25 and $100. Banks make an exception for children, as the savings account is often the first bank account opened for them. Most financial establishments are quite accommodating to children, as this is one way to develop their future customer base.
Depositors who open a personal savings account can make three to six withdrawals and white up to three checks a month.
Some financial establishments also offer online-only savings accounts, along with standard savings calculators. These accounts are offered with high interest rates, along with more security restrictions. While banks offer high interest rates with these accounts, they make profits by attracting more deposits. Regardless of the fact that deposits are liabilities for financial institutions, and depositors can withdraw them any time, deposits are used to make more loans. Loans are assets for banks because the interest they charge on loans generates profit.
In what cases are savings accounts a good choice? Some bank customers prefer interest checking accounts, which pay lower interest compared to a savings account. At the same time, a savings account is a better option if you won't need the money over a period of several months. If you will not be able to maintain the minimum balance, you should not open a savings account because you will not benefit from the interest earned.
When you choose a savings account, you should take several factors into account. Ask about the fees and service charges first. Second, find out the minimum balance requirement, as you will be charged a fee if you do not keep certain money in your savings account. Lastly, you should check the interest rate, as this is how you profit from holding a savings account.
This informational resource, will help you learn more about savings accounts in Canada.
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