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What is the difference between foreign exchange margin and foreign exchange firm offer of domestic banks? What are their advantages and disadvantages?
At present, most banks in Chinese mainland have launched foreign exchange firm offer business, but compared with margin business, firm offer business has many shortcomings.

First of all, the price difference is too big. For example, the spread of many banks is basically between 16-40. Such a large price difference greatly reduces the profitability of customers, and it is difficult to get opportunities for intraday trading. The spread of margin operation is basically the spread of interbank transactions, which is generally between 4 and 5 points. For example, CMS provides customers with a spread of 3 to 4 points, so that customers can have the opportunity to operate in the day at any time.

Secondly, firm traders can only make profits in one direction. For example, if your principal is US dollars, you can only make a profit if the US dollar falls after buying other currencies. If the dollar continues to rise, then your position will be "locked", either reducing your position and stopping loss, or missing other trading opportunities in vain. The margin operation can move freely in the market direction. When other currencies rise, you can sell dollars and buy other currencies (short dollars) for profit, while when other currencies fall, you can buy dollars and sell other currencies (long dollars) for profit.

Another biggest advantage is the leverage of margin. When you make a firm deal, you must envy those big customers. Their funds are tens of thousands of dollars, because their profits are also relatively large. In margin trading, general market makers or dealers provide a certain proportion of financing for customers' transactions. The higher the ratio, the less principal you need, and the more opportunities for profit. For example, CMS provides customers with different financing ratios of 65,438+000-400 times, and provides mini accounts for novices, so that you can trade 65,438+00000 dollars for only 25 dollars. Even if you invest $200 to open a mini-account, you can get the same capital conditions as a big customer with a capital of $65,438+$00,000 to $20,000 in a firm transaction (we suggest that you leave enough margin to prevent risks).