The daily trading volume of spot foreign exchange market is as high as 1.4 trillion US dollars, making it the largest financial market with the highest liquidity in the world. Compared with the trading volume and foreign exchange market, the scale of other financial markets is much inferior. If you take the futures market with a daily trading volume of only $30 billion as an example, you will have a clear concept of the degree of liquidity. The foreign exchange market is always liquid, and it can trade or stop trading at any time.
Second, the foreign exchange market is open 24 hours a day.
The foreign exchange market is a 24-hour uninterrupted market. Foreign exchange trading started in Sydney, Australia at 5pm EST on Sunday, then in Tokyo, Japan at 7am, in London, England at 2am and finally in new york, USA at 8am. For investors, whenever and wherever any news happens, investors can respond immediately. Investors can also flexibly plan the time of entry or exit.
Compared with the forward foreign exchange market in the United States, such as Chicago Mercantile Exchange or Philadelphia Stock Exchange, there are certain restrictions on business hours. As far as the Chicago Mercantile Exchange is concerned, the business hours are from 8: 20 am to 2: 00 pm EST. Therefore, if no important news about London or Tokyo is announced during business hours, the opening of the next day will be very chaotic.
Third: the quality and speed of the transaction.
Every transaction in the futures market has a different trading date, a different price or a different contract content. Every futures trader has the following experience. A futures transaction often takes half an hour to close, and the final transaction price is bound to be far apart. Although there is the assistance of electronic trading and the guarantee of binding trading, the trading of market price list is still quite unstable. Foreign exchange dealers provide stable quotations and real-time trading, and investors can trade with real-time market quotations, even when the market situation is busiest and trading is impossible. In the futures market, the uncertainty of transaction price is because all orders must be matched through centralized exchanges, which limits the number of traders, the flow of funds and the total transaction amount at the same price. And every quotation of foreign exchange dealers is executed, that is, as long as investors are willing to make a deal!
Fourth: handling fee
There will be no price, but there will be no transaction. Foreign exchange transactions will be bought and sold in the futures market without commission. In addition to the price difference, investors must also bear additional commissions or handling fees. All financial commodities have a bid price and a bid price, and the difference between the bid price and the bid price is defined as the price difference, or transaction cost. Until today, because of the lack of transparency, the unreasonable price difference in the futures market is still a fact. Now, investors can judge the depth of the market and the real transaction cost through the real-time display of the buying price and selling price on the online trading platform. The spread of foreign exchange trading is much lower than that of futures trading, especially after-hours trading, because futures investors are easily affected by low liquidity and suffer great losses.