Corporat finance

Forex exchange

Submitted To sir wisal

Submitted By adnan khan

R/No 13

MBA 3rd

Date 27/04/10

Institute of Computer & Management

Science

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 Contents

S/NO Description Page No

1. Management of an event 1

2. Introduction 1

3. Event management 1

4. Planning process for wedding ceremony party 1

5. Organizing process of wedding ceremony party 2

6. Directing of wedding ceremony party 3

7. Controlling of wedding ceremony party 4

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Forex Exchange Market
The forex market is also known as the foreign exchange market and is the world’s
biggest
financial market. It is where foreign currency trading takes place through the buying and
selling of special foreign currency pairs with different traders in different exchanges.
The exchange rate depends on the performance of a foreign currency pair on different
international exchanges. Forex trading is different from investing in the stock market.

The forex exchange is global and the stock market is based on business products within
one country. Other differences between these two markets is that fx trading can take
place 24 hours a day and stock trading only takes place for 8 hours per day. Also, when
trading in one of the stock market exchanges you are only trading in that country’s
currency, but when trading in a forex exchange you may trade many types of currencies
across countries.

Explained below are the major players when trading forex. These include the
consumers, the businesses, investors, speculators, investment banks, commercial
banks, and central banks. Consumers who are visiting other countries need to
exchange currencies when they are traveling in order to buy local goods and services.
They cannot determine the price on the forex exchange, but they do make-up a
significant portion of the volume traded in the market. Businesses are another major
player since they import and export goods and services needed to exchange currencies
to receive or make payments for goods they may have bought or services they may
have rendered. Investors and speculators also require currencies to buy and sell
investment instruments such as shares, bonds, real estate, or bank deposits. The forex
exchange also consists of investment banks and large commercial banks. These banks
determine the prices through buying and selling currencies at the bid-and-offer
exchange rates declared through their forex exchange dealers. Foreign exchange
trading also includes central banks that participate for a particular government. They
trade currency to help even out the fluctuation of the value of their economy’s currency
and to facilitate government monetary policies.

Forex currency trading is truly the largest exchange in the world. The amount of dollars
traded through the forex exchange is in the trillions, and this market is generally
considered to be less volatile than the stock market. This is because it is highly unlikely
for the value of a single currency to move much through the course of a trading day,
unlike stocks. There are several different markets within the forex exchange system.
There is the spot market that deals with trades based on the current values of currencies
and it takes two days for settlement. Two traders will exchange an equivalent amount of
a different foreign currency. The other two types of forex markets are the forward and
the futures markets. The buyer and the seller agree on an exchange rate and a
transaction is set for a specific time in the future in a forward market. The trade is then
executed at the time regardless of what the rates are. On the contrary the futures market
is when futures contracts are bought and sold based on a standard contract size and
maturity date. These trades take place on public commodities markets.

This is quick overview of the forex exchange that should help you get started. If you are

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seriously interested in trading forex, then you must invest in your education and study
very hard before you begin. This is not an area to jump quickly into, although investing
your money should never be!

Types of forex exchange

Forex is due to international trade, foreign exchange transactions between

the settlement of international claims, debts, or tools. However, the last
decade, foreign exchange transactions doubled in number, in essence, a
major change. Forex trading is a tool of international trade has become the
most important financial products. Types of foreign exchange transactions in
foreign exchange transactions with the nature of diversification.

Forex trading can be divided into: cash, stock, cash contracts, futures,
options, forward transactions. Specifically, cash transactions are needed for
various purposes tourists and other foreign currency cash transactions were
carried out, including cash, foreign exchange traveler’s checks, etc.; spot
trading between large banks, large banks on behalf of large customers, the
sale agreement transaction, the funds within two business days to complete
payment delivery; contracts and spot trading, investment finance company
signed a contract to the way foreign exchange trading for public investment;
futures is based on the agreed time, according to the rate of exchange
transactions have been identified , the amount of each contract is fixed;
options trading is the buying and selling a future is an option to pre-currency
transactions; forward transactions are in accordance with the provisions of
the contract date for delivery, contracts, delivery of flexible.

Diversification of foreign exchange trading varieties

1, is the development of international trade on foreign exchange transactions
made several requests to expand the exchange rate volatility, exchange rate
changes in import and export business in order to avoid a loss, forward
foreign exchange transactions, futures, foreign exchange transactions;
2, is the major industrial countries, the result of the continuous development
of the financial industry. Major industrial countries, diversification of financial
products. For example, with soybean, cotton, development of commodity
futures, foreign exchange futures to join the ranks of the stock area, there
has been equity trading, foreign exchange introduction of the “exchange
power” of the transaction, the development of a foreign exchange options
trading.

Terms of the number of foreign exchange transactions, international trade in

foreign exchange transactions in the entire reduction in the proportion of
foreign exchange transactions, according to statistics, the proportion of only
4%. Now the mainstream foreign exchange investment is in foreign currency
exchange rate fluctuations for the purpose of profit. Spot, spot and futures
contracts in foreign exchange transactions had the largest share, spot
trading is mainly trading between banks and banking.

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How it works
Foreign exchange currency trading, or often referred to as Forex (FX) currency trading,
is simply the trading of foreign currencies in a forex market. This form of trading was
initiated by the event of the Breton Woods Agreement in 1944. This agreement was an
effort to keep cash from draining out of the war-ravaged Europe. The U.S. Dollar served
as the basis for currency values, which was pegged to the price of gold.

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When this agreement had collapsed, the modern era of foreign exchange then emerged
in 1971. By then the U.S Dollar was no longer convertible to gold, signaling an increase
in currency market volatility and trading opportunities, however, during the collapse of
the Smithsonian and European Joint Float agreements in 1973, the true free-floating
currency exchange began to transpire. With the aid of the computer technology, the
reach of the exchange marketplace was extended. Values of major word currencies
today have become independent of each other.

There are four known currency pairs that dominate the percentage of trades. This are
identified when buying and selling in the forex currency trading system market. These
four currency pairs are the Euro vs. U.S. Dollar, the U.S. Dollar vs. the Japanese Yen,
the U.S. Dollar vs. Swiss Franc, and the U.S. Dollar vs. the British Pound.

When investing in currency, the primary goal is to hold a currency that appreciates in
value relevant to the other currencies. Here is a simplistic example. If 50 British Pounds
were bought for 100 U.S. Dollars, then held the Pounds for one week, considering that
in that period the value of Pounds increased in relation to U.S. Dollars, those Pounds
could then be converted back into $120 for example.

The forex currency trading is open for trades the whole 24 hours in a day. Compared to
the domestic stock markets, the foreign currency trading is always in business since
every country from different regions of the globe trade on the FX market. In addition, the
other important distinction of the forex currency trading from the domestic stock
exchange is that it does not rely on a central body or organization such as the NYSE or
NASDAQ to act as middleman. Usually, the trading flows between major banking
centers around the world.

Previously, currency trading had very high barriers to entry, giving only large banking
and institutional firms the access to the tools and systems required to participate in the
forex trading. With the advent of the internet, there came the FX brokers. These forex
brokers may be thought of as something similar to an online stock trading account such
as etrade. This enables anybody to play the forex trading game by opening an account
and buy and sell in quantity. The large minimum transaction size can be met by brokers
as these are composed of thousands of investors placing orders through tem.

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It may seem easy to start trading forex, however, it is undeniably a complicated and
complex market. As it offers a tremendous opportunity for wealth, it is also very easy to
lose a whole lot. It is best to first to do research, understand and analyze as much on
this matter before investing your hard earned money.

Foreign exchange trading:

Foreign Exchange Trading or FX Trading, clients are able to hedge against, or speculate upon,
changes in the exchange rate of two currencies. For example, a speculator can long EUR/USD in
foreign exchange market in order to profit from capturing the appreciation of Euro against the
U.S. Dollar. Foreign exchange services provide an opportunity for clients to trade FX. Foreign
Exchange Trading is done on the foreign exchange market.

Foreign exchange market:

The foreign exchange market (forex, FX, or currency market) is a worldwide decentralized over-
the-counter financial market for the trading of currencies. Financial centers around the world
function as anchors of trading between a wide range of different types of buyers and sellers
around the clock, with the exception of weekends. The foreign exchange market determines the
relative values of different currencies.

The primary purpose of the foreign exchange is to assist international trade and investment, by
allowing businesses to convert one currency to another currency. For example, it permits a US
business to import British goods and pay Pound Sterling, even though the business's income is in
US dollars. It also supports speculation, and facilitates the carry trade, in which investors
borrow low-yielding currencies and lend (invest in) high-yielding currencies, and which (it has
been claimed) may lead to loss of competitiveness in some countries.

In a typical foreign exchange transaction, a party purchases a quantity of one currency by paying
a quantity of another currency. The modern foreign exchange market began forming during the
1970s when countries gradually switched to floating exchange rates from the previous exchange
rate regime, which remained fixed as per the Bretton Woods system.

The foreign exchange market is unique because of:

 its huge trading volume, leading to high liquidity
 its geographical dispersion

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  its continuous operation: 24 hours a day except weekends
 the variety of factors that affect exchange rates
 the low margins of relative profit compared with other markets of fixed income
 The use of leverage to enhance profit margins with respect to account size.

As such, it has been referred to as the market closest to the ideal of perfect competition,
notwithstanding market manipulation by central banks. According to the Bank for International
Settlements, as of April 2010, average daily turnover in global foreign exchange markets is
estimated at $3.98 trillion, a growth of approximately 20% over the $3.21 trillion daily volume as
of April 2007.

The $3.98 trillion break-down is as follows:

 $1.490 trillion in spot transactions
 $475 billion in outright forwards
 $1.765 trillion in foreign exchange swaps
 $43 billion currency swaps
 $207 billion in options and other products

Foreign exchange may refer to:

 foreign exchange markets, where money in one currency is exchanged for another
 Exchange rate, the price for which one currency is exchanged for another
 foreign exchange reserves, holdings of other countries' currencies