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What's Forex?

"Forex" stands for foreign exchange; it's also known as FX. In a forex trade, you buy one currency while simultaneously selling another - that is, you're exchanging the sold currency for the one you're buying. The foreign exchange market is an over-the-counter market. Currencies trade in pairs, like the Euro-US Dollar (EUR/USD) or US Dollar / Japanese Yen (USD/JPY). Unlike stocks or futures, there's no centralized exchange for forex. All transactions happen via phone or electronic network

Understanding Forex Quotes

Reading a foreign exchange quote is simple if you remember two things:The first currency listed is the base currencyThe value of the base currency is always 1. As the centerpiece of the forex market, the US dollar is usually considered the base currency for quotes. When the base currency is USD, think of the quote as telling you what a US dollar is worth in that other currency.

London Stock Exchange

There's no trouble in this river city, not for the London Stock Exchange (LSE). As Europe's largest stock exchange (and one of the oldest), the LSE lists some 3,600 depository receipts, Eurobonds, and company shares. The LSE includes the main market, the Professional Securities Market (or PSM, listed debt securities), and the Alternative Investment Market (or AIM, which lists new and growing companies). The LSE is also a leader in international IPOs. Its 2007 merger with Borsa Italiana gave the exchange additional clearing and settlement operations and is part of its international expansion strategy that includes a cooperative agreement with the Tokyo Stock Exchange

Financial & Investment Dictionary LSE

(LSE) formed in 1760 as a club at Jonathan's Coffee House by 150 brokers who were kicked out of the Royal Exchange for rowdiness. The Stock Exchange name was adopted in 1773 and it became a regulated exchange in 1801. Following deregulation in 1986-the Big Bang-the LSE introduced computerized trading via the SEAQ (Stock Exchange Automatic Quotation) and SEAQ International systems that display share price information in brokers' offices throughout the United Kingdom. The LSE became a public limited company in 2000 and transferred its role as the U.K. Listing Authority to the Financial Services Authority

About the Chicago Mercantile Exchange

The Chicago Mercantile Exchange is the United States. largest futures exchange, as well as the second largest in the world. It trades futures and options on interest rates, stock indexes, foreign currencies, and agricultural commodities. In 2004, the exchange traded 805.3 million contracts with a value of $463.4 trillion

Facilitating company growth

Companies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary business assets. A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion

Function and purpose

The stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate.

What is options trading?

An option is a financial instrument that you can buy and sell with the goal of generating other income on stocks you already own or to speculate on stock price movements.
There are two basic types of options: calls and puts.
A call option contract gives the owner the right (but not the obligation) to buy a specified amount of an underlying security, typically 100 shares per contract, at a specified price within a specified time.
A put option contract gives the owner the right, but not the obligation, to sell a specified amount of an underlying security, typically 100 shares per contract, at a set price within a specified time. The buyer of a put option estimates that the value of the underlying asset will drop below the exercise price before the expiration date.
Please note: Options involve risk and are not suitable for all investors. Before investing in options, please read the Characteristics and Risks of Standardized Options.

What is margin borrowing?

Margin borrowing is a feature on an Individual or Joint brokerage account in which the broker (ShareBuilder) extends credit to you, the customer, to purchase securities or to withdraw excess cash for use outside your account. The account equity (securities and cash) is used as collateral for the loan that is taken out in the account.
If the value of the stock in the account increases, the buying power and loan availability of your account increases. Conversely, if the value of the stock drops sufficiently, you will be required to deposit more cash or sell a portion of the stock to cover a margin call.
Important: Buying securities on margin is not appropriate for all investors. Before investing on margin, please read the Margin Account Agreement for important risk disclosure information, and see ShareBuilder's margin interest rates.

Forex Trading Is

Trading Is Very Speculative and Risky. Foreign Exchange Trading and Spot Metal Trading is highly speculative and is suitable only for those customers who (a) understand and are willing to assume the economic, legal and other risks involved, and (b) are financially able to assume losses significantly in excess of Margin or deposits. Foreign Exchange and Spot Metal Trading and is not an appropriate investment for retirement funds. Customer represents, warrants and agrees that Customer understands these risks; that Customer is willing and able, financially and otherwise, to assume the risks of Foreign Exchange Trading and Spot Metal Trading and that loss of Customer’s entire Account Balance will not change Customer’s life style.2. High Leverage And Low Margin Can Lead To Quick Losses. The high leverage and low Margin associated with Foreign Exchange Trading and Spot Metal Trading can result in significant losses due to price changes in Foreign Exchange Contracts, Cross Currency Contracts and Metal Contracts. Customers must maintain the Minimum Margin Requirement on their Open Positions at all times. It is the customer's responsibility to monitor his/her Account Balance. Forex.com has the right to liquidate any or all Open Positions whenever the Minimum Margin Requirement is not maintained. Increasing leverage increases risk.3. Prices, Margin And Valuations Are Set By Forex.com And May Be Different From Prices Reported Elsewhere. Forex.com will provide prices to be used in trading, valuation of Customer positions and determination of Margin requirements. Although Forex.com expects that these prices will be reasonably related to prices available in the interbank market, prices reported by Forex.com may vary from prices available to banks and other participants in what is known as the interbank market. Forex.com will exercise considerable discretion in setting and collecting Margin. Forex.com is authorized to convert funds in Customer’s Account for Margin into and from such Foreign Currency and Metal at a rate of exchange determined by Forex.com in its sole discretion on the basis of then-prevailing money market rates.4.

Forex MARGIN

MARGIN REQUIREMENTS. Customer shall provide and maintain with Forex.com margin in such amounts and in such form that Forex.com, in it is sole discretion may require. Forex.com does not require Customers to pay the full price of Foreign Currencies or metal Customer may buy and sell. Instead, Customer is required to post a small percentage of the full amount which Customer is obligated to pay to Forex.com under the Contract, to secure Customer’s obligations to Forex.com. Margin includes Required Margin for Open Positions, which is based on (i) the Opening Margin Requirement; (ii) the Minimum Margin Requirement; (iii) the market value of Open Positions; and (iv) any additional amount as Forex.com, in its sole discretion, believes is prudent to require. Customer must maintain the Minimum Margin Requirement on their Open Positions at all times. Forex.com has the right to liquidate any or all Open Positions whenever the Minimum Margin Requirement is not maintained, according to paragraph 6 hereof. Margin requirements are subject to change at any time in Forex.com’s sole discretion and without prior notice. No previous margin requirement shall preclude Forex.com from increasing that requirement without prior notice. Forex.com may, in its sole discretion, elect to impose on a disclosed on undisclosed basis limitations on the maximum number of Open Positions allowed at any time

Forex LIQUIDATION

LIQUIDATION LEVEL. Subject to all additional rights of forex.com under the Customer Agreemen t, in the event that, in the sole opinion of Forex.com and in accordance with Forex.com’s reasonable best estimate of then prevailing obtainable market Spot Rates, and regardless of whether or not prior Margin Calls have been issued or met, if the Margin Balance should at any time equal or fall below the Minimum Margin Requirement for Customer’s Account in the aggregate, Forex.com will have the right but not the obligation to liquidate any part of or all Open Positions in Customer’s Account. Clients are responsible for placing their own Stop Loss Orders to minimize losses. Any failure by Forex.com to enforce its rights hereunder shall not be deemed a future waiver of such rights by Forex.com. Forex.com does not make margin calls in the ordinary course of business. Forex.com maintains the right to liquidate Customer positions as described above. However, Forex.com may from time to time and in its sole discretion, call Customer and request that Customer deposit additional Collateral to secure Customer’s obligations to Forex.com, over and above the balance in Customer’s Account. Any call for additional margin without exercising the rights to liquidate Customer positions shall not be deemed precedent for future calls nor future waiver of such liquidation rights by Forex.com.

Forex FOREX IS AN

FOREX IS AN OVER THE COUNTER (OTC) MARKET, MEANING THE FOREIGN CURRENCY TRADING YOU ARE ENTERING INTO IS NOT CONDUCTED ON AN EXCHANGE. AS A MARKET MAKER, FOREX.COM IS THE COUNTERPARTY IN THESE TRANSACTIONS AND, THEREFORE, ACTS AS THE BUYER WHEN YOU SELL AND THE SELLER WHEN YOU BUY. AS A RESULT, FOREX.COM’S INTERESTS MAY BE IN CONFLICT WITH YOURS. UNLESS OTHERWISE SPECIFIED IN YOUR WRITTEN AGREEMENT OR OTHER WRITTEN DOCUMENTS FOREX.COM ESTABLISHES THE PRICES AT WHICH IT OFFERS TO TRADE WITH YOU. THE PRICES OFFERED MIGHT NOT BE THE BEST PRICES AVAILABLE AND DIFFERENT PRICES MAY BE OFFERED TO DIFFERENT CUSTOMERS.

Forex The high

The high leverage and low margin associated with Foreign Exchange Trading and Spot Metal Trading can result in significant losses due to price changes in Foreign Exchange Contracts, Cross Currency Contracts and Metal Contracts. Company’s margin policies may require that additional funds be provided to properly margin Customer’s Account and that Customer must immediately meet such margin requirements. Failure to maintain Margin Balance in an amount equal to or exceeding 25% of initial margin requirement may result in the liquidation of any open positions with resultant loss to Customer.

Forex Secondary

Secondary Risk Disclosure: High Risk InvestmentTrading is very speculative and risky. Foreign Exchange Trading is highly speculative and is suitable only for those customers who (a) understand and are willing to assume the economic, legal and other risks involved, and (b) are financially able to assume losses significantly in excess of margin or deposits. Customer represents, warrants and agrees that Customer understands these risks; that Customer is willing and able, financially and otherwise, to assume the risks of Foreign Exchange Trading and Spot Metal Trading and that loss of Customer’s entire Account Balance will not change Customer’s life style.

Forex Live Chat

Forex Live ChatLatest FXCM NewsThursday, June 25, 2009Compliance Rule 2-43(b) goes into effect after July 31st, 2009As a result of compliance rule 2-43(b), forex traders will no longer have the ability to place stop-loss or limit orders. Also, traders will no longer be able to modify or close trades from the "Open Positions" window.Read More