forex - Definition, What is forex, Advantages of forex, and Latest News - ClearTax (2024)

Scroll Top

forex - Definition, What is forex, Advantages of forex, and Latest News - ClearTax (61)

    forex - Definition, What is forex, Advantages of forex, and Latest News - ClearTax (62)

    Savings/Wealth Management

    Updated on Dec 18th, 2023

    forex - Definition, What is forex, Advantages of forex, and Latest News - ClearTax (63)forex - Definition, What is forex, Advantages of forex, and Latest News - ClearTax (64)forex - Definition, What is forex, Advantages of forex, and Latest News - ClearTax (65)forex - Definition, What is forex, Advantages of forex, and Latest News - ClearTax (66)

    Definition for FOREX

    • Foreign exchange, very simply put, is the exchange or trade of one currency with another.
    • Foreign currencies as an asset class can be used to earn the interest rate differential between currencies in question and one can also profit from the changes in exchange rate.
    • These exchanges usually take place in the foreign exchange markets – which need not be physical marketplaces necessarily.
    • A foreign exchange market is one of the most liquid markets in the world and has no centralised location.
    • The market determines the value of a majority of the currencies – this quantification is known as the exchange rate.

    Trading in FOREX

    • Foreign exchange is traded 24 hours a day, 5 days a week and is done on a host of different networks.
    • Some of the major financial centres that trade in currencies are New York, Tokyo, Hong Kong, Singapore, London, Paris Frankfurt, Zurich, and Sydney.
    • There is no physical exchange of currency in a forex market like a foreign exchange kiosk. Currency is traded electronically over-the-counter.
    • Trading currencies are usually listed in pairs. Example, USD/CAD, USD/JPY etc.
    • These currencies are usually traded in lots. The lots may be categorised as micro, mini and standard lots measured as 1000 worth of a given currency, 10000 worth of a given currency and 10000 worth of a given currency respectively. One can choose to trade in multiples of a lot, like 3 micro lots and 79 standard lots.
    • Trading volume in foreign exchange market is very high.
    • There exist sport markets for currencies too, wherein the transactions of the pairs are settled within a period of two days. The price is established on the trade date, but money is ideally exchanged on the value date. And the prices of currencies are rather volatile in this market.
    • Currencies can also be traded in the futures market.

    Difference Between Foreign Exchange and Other Markets

    • There is no clearing house present in forex markets like other markets.
    • No central body or regulator oversees the functioning of the forex markets.
    • There is no cut off time unlike other traditional markets.
    • Forex markets are more liquid and have easier trading access than other markets.
    • There are no fees and commission charged unlike other markets.

    Index

    Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

    Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

    CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

    Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

    Cleartax is a product by Defmacro Software Pvt. Ltd.

    Company PolicyTerms of use

    forex - Definition, What is forex, Advantages of forex, and Latest News - ClearTax (73)

    ISO 27001

    Data Center

    forex - Definition, What is forex, Advantages of forex, and Latest News - ClearTax (74)

    SSL Certified Site

    128-bit encryption

    forex - Definition, What is forex, Advantages of forex, and Latest News - ClearTax (2024)

    References

    Top Articles
    Latest Posts
    Article information

    Author: Sen. Emmett Berge

    Last Updated:

    Views: 6315

    Rating: 5 / 5 (80 voted)

    Reviews: 95% of readers found this page helpful

    Author information

    Name: Sen. Emmett Berge

    Birthday: 1993-06-17

    Address: 787 Elvis Divide, Port Brice, OH 24507-6802

    Phone: +9779049645255

    Job: Senior Healthcare Specialist

    Hobby: Cycling, Model building, Kitesurfing, Origami, Lapidary, Dance, Basketball

    Introduction: My name is Sen. Emmett Berge, I am a funny, vast, charming, courageous, enthusiastic, jolly, famous person who loves writing and wants to share my knowledge and understanding with you.