Forex

Forex

See: Foreign exchange

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Forex

A market for the trading of currencies. For example, one may buy dollars or sell pounds on a forex market. Foreign exchange is one the largest and most liquid markets in the world. Trading occurs over-the-counter, and most of the major players are governments, banks, and speculators. Forex markets are often used in hedging strategies.

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Foreign exchange (FOREX). Any type of financial instrument that is used to make payments between countries is considered foreign exchange. The list of instruments includes electronic transactions, paper currency, checks, and signed, written orders called bills of exchange.

Large-scale currency trading, with minimums of $1 million, is also considered foreign exchange and can be handled as spot price transactions, forward contract transactions, or swap contracts.

Spot transactions close at the market price within two days, and the others are set to close at an agreed-upon price and an agreed-upon date in the future.

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Forex (FX)

What Does Forex (FX) Mean?

The currency exchange marketplace; the forex market is the largest, most liquid market in the world, with average trading values in the billions each day, and includes all the currencies in the world.

Investopedia explains Forex (FX)

There is no central marketplace for currency exchange; trade is conducted over the counter. The Forex market is open 24 hours a day, five days a week, and currencies are traded worldwide among the major financial centers of London, New York, Tokyo, Frankfurt, Hong Kong, Singapore, Paris, Sydney, and others. The forex is the largest market in the world in terms of the total cash value traded, and any person, firm, or country may participate in this market.

Related Terms:
• Arbitrage
• Currency Forward
• Currency Swap
• Euro LIBOR
• Over-the-Counter—OTC