Forex Trading Anyone?

musicmanaman · 3rd September 2009, 15:49

Hi All,

Wanted to know about Forex Trading, unlike stock trading, forex trading is not that well know in India.

Do we have forex traders in the forum, who can shed some light on the subject, like trading planforms and brokeage houses that provide facilities to forex trade in India.

kannan666 · 3rd September 2009, 16:28

Have done a lot of unofficial forex trading like buying foreign currency legally and then selling them back also legally (with bills) through an authorised agent, do not know about any forex trading exchange though.

musicmanaman · 3rd September 2009, 21:51

Spot Trading Example

The Spread: The EUR/USD rate is quoted at '1.2500/05'. This quote represents the bid/ask spread for EUR vs USD.

The Ask: The offer rate of 1.2505 is the rate at which you can exchange your USD for EUR or, this means purchasing EUR with USD, or BUY EUR and SELL USD.

The Bid: The bid rate of 1.2500 is the rate at which you can Sell EUR to buy USD.

Going Long: You believe that the Euro will strengthen against the US Dollar, and decide to BUY or 'go long' EUR 500,000 at 1.2505 (ask price).

Opening Buy: Customer buys EUR 500,000 at 1.2505
Quote (bid/ask) 1.2500/05
Buy Price 1.2505
Volume EUR 500,000
Initial margin (Leverage as high as 100:1) EUR 5,000

Later: Your prediction proved to be correct and the Euro appreciates against the US Dollar. The quote on EUR/USD is now 1.2590/95. To close your position, you decide to SELL EUR 500,000 at 1.2590 (bid price).

Closing Sell: Customer sell EUR 500,000 at 1.2590
Quote (bid/offer) 1.2590/95
Sell price 1.2590
Volume EUR 500,000
Profit/loss $ 4,250 profit
Profit/loss Calculation:

Size of trade x (sell price - buy price) = profit & loss USD
500,000 x (1.2590 - 1.2505) = $ 4,250 profit
Or, converting the $ 4,250 back to EUR at a rate of 1.2590:
(Profit/loss : EUR rate) = profit & loss EUR
(4,250 : 1.2590) = EUR 3,375.7 profit

By closing your position you realize a gross profit of EUR 3,375.7.
Had you estimated incorrectly, and sold EUR at 1.2500 and then bought EUR at 1.2595, a loss of $ 4,750 would have been sustained.

manduvindupondu · 5th March 2013, 12:52

USD/INR options have good volumes. You can try different options trading strategies like straddle, strangle etc. The main advantage of currency derivatives is the low margin requirement (as low as 1100 for a USD/INR lot) for selling calls/puts.

3rd September 2009, 15:49	#1
musicmanaman BHPian Join Date: Nov 2006 Location: kolkata Posts: 927 Thanked: 25 Times	Forex Trading Anyone? Hi All, Wanted to know about Forex Trading, unlike stock trading, forex trading is not that well know in India. Do we have forex traders in the forum, who can shed some light on the subject, like trading planforms and brokeage houses that provide facilities to forex trade in India.
	() Thanks

3rd September 2009, 16:28	#2
kannan666 Senior - BHPian Join Date: Aug 2007 Location: KA-02 Posts: 1,002 Thanked: 128 Times View My Garage	Have done a lot of unofficial forex trading like buying foreign currency legally and then selling them back also legally (with bills) through an authorised agent, do not know about any forex trading exchange though.
	() Thanks

3rd September 2009, 21:51	#3
musicmanaman BHPian Join Date: Nov 2006 Location: kolkata Posts: 927 Thanked: 25 Times	This example on iFOREX website got me interested. Spot Trading Example The Spread: The EUR/USD rate is quoted at '1.2500/05'. This quote represents the bid/ask spread for EUR vs USD. The Ask: The offer rate of 1.2505 is the rate at which you can exchange your USD for EUR or, this means purchasing EUR with USD, or BUY EUR and SELL USD. The Bid: The bid rate of 1.2500 is the rate at which you can Sell EUR to buy USD. Going Long: You believe that the Euro will strengthen against the US Dollar, and decide to BUY or 'go long' EUR 500,000 at 1.2505 (ask price). Opening Buy: Customer buys EUR 500,000 at 1.2505 Quote (bid/ask) 1.2500/05 Buy Price 1.2505 Volume EUR 500,000 Initial margin (Leverage as high as 100:1) EUR 5,000 Later: Your prediction proved to be correct and the Euro appreciates against the US Dollar. The quote on EUR/USD is now 1.2590/95. To close your position, you decide to SELL EUR 500,000 at 1.2590 (bid price). Closing Sell: Customer sell EUR 500,000 at 1.2590 Quote (bid/offer) 1.2590/95 Sell price 1.2590 Volume EUR 500,000 Profit/loss $ 4,250 profit Profit/loss Calculation: Size of trade x (sell price - buy price) = profit & loss USD 500,000 x (1.2590 - 1.2505) = $ 4,250 profit Or, converting the $ 4,250 back to EUR at a rate of 1.2590: (Profit/loss : EUR rate) = profit & loss EUR (4,250 : 1.2590) = EUR 3,375.7 profit By closing your position you realize a gross profit of EUR 3,375.7. Had you estimated incorrectly, and sold EUR at 1.2500 and then bought EUR at 1.2595, a loss of $ 4,750 would have been sustained.
	() Thanks

5th March 2013, 12:52	#4
manduvindupondu BHPian Join Date: May 2010 Location: Hyderabad Posts: 100 Thanked: 36 Times	Re: Forex Trading Anyone? USD/INR options have good volumes. You can try different options trading strategies like straddle, strangle etc. The main advantage of currency derivatives is the low margin requirement (as low as 1100 for a USD/INR lot) for selling calls/puts.
	() Thanks