Forex Market or Foreign exchange market is open 24 hours a day, starting from 5pm EST Sunday to 4pm EST Friday. This offers traders the flexibility of choosing forex trading hours to suit their convenience. Stock markets have predefined business hours. They normally do not operate on weekends and bank holidays. The main trading centers of the world are Sydney, Tokyo, London, Frankfurt and New York. Foreign currency trading begins each day in Sydney, and moves around the globe to Tokyo, London, and New York. This offers flexibility to investors to take advantage of currency movements which are often caused by political, economic or social factors at any time of the day.
In Stock market, trade is regulated by exchange houses. The exchange houses dictate the operating terms and conditions for stock exchanges. Each country has its own separate stock exchange. Foreign currency trade transactions are carried out at the Inter bank market which is also regarded as an OTC Market. The trade transaction is directly done between two counterparts over global electronic network. The trading instructions are exchanged via global computer network over telephone or computers.
In forex market currencies are traded. Currencies can be easily traded for other currencies or cash almost immediately in this market. Stock trading is restricted to stocks of a particular country listed in its exchange. All stock market transactions are carried out in the currency of the respective countries. Investors often are unable to decide whether to go in for Forex Trading or Stock trading. There are some key differences in the way both these markets operate.
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