Why trade Foreign Exchange?
Benefits of trading margined spot and forward foreign exchange
Foreign exchange trading is one of the most popular ways to trade financial markets as it allows access to the markets 24 hours a day. It involves the buying of one currency against the sale of another. Currencies are quoted in pairs for example Sterling/Dollar with the movement in price occurring when one currency strengthens against the other.
Margin trading
Cantor FX offers foreign exchange as a leveraged product meaning you are required to deposit only a percentage of the value of your position in order to trade. The leverage offered allows you to increase the return that you may be able to achieve relative to the funds deposited, but you must be aware that, should the market move against you, it may have the effect of creating losses in excess of your deposited funds.
24 hour trading
As an over-the-counter (OTC) market, foreign exchange can be traded 24 hours a day allowing you to enter and exit the market at any time. At Cantor FX we allow our clients to trade 24 hours online and over the telephone.
No contract expiries
Unlike many other forms of trading, leveraged foreign exchange trades do not have contract expiriy or delivery dates. That way, trades can be placed and rolled for your desired period of time in the security that they will be kept open, providing you have enough margin to cover them.
Liquidity
The foreign exchange market is the largest and most liquid in the world. Having liquidity in a market ensures the ability to buy or sell with ease and without affecting the market price. Liquidity is characterised by a high level of trading activity and ensures access to size at tight spreads.
Trading foreign exchange or precious metals carries a high level of risk to your capital and is not suitable for all customers. Furthermore, margined products use leverage to increase the level of exposure to the product, and as a result your losses may rapidly and substantially exceed your initial deposit and require you to make additional deposits at short notice. Prior to trading leveraged FX or precious metals, you should carefully consider your investment objectives, experience and risk appetite and should not invest money that you cannot afford to lose. You should ensure you fully understand the risks and seek independent financial advice if in doubt. Cantor Fitzgerald provides an execution only service and does not offer investment advice.
