The way foreign exchange speculation and analysis
Foreign exchange speculation of the problem
As the foreign exchange market, there is exchange rate fluctuations, exchange rate fluctuations in foreign exchange transactions both to those who may have suffered losses, there is also the possibility of its return. This resulted in the foreign exchange risk as an opportunity to make money and take advantage of the situation, this is speculative foreign exchange transactions.
Foreign exchange speculation are good or bad? Can not generalize, there is a risk the foreign exchange market, while importers and exporters and banks are mostly unwilling to take risks and are willing to risk passed on to speculators, speculators are making the foreign exchange market is an important component. Overall, the pros and cons, foreign exchange speculators on the one hand to prevent excessive exchange rate volatility and to maintain vitality of the market played an active role; the other hand, excessive speculation and easy to disrupt the financial order. Such as Singapore, Leeson speculative mistakes made by the collapse of Barings Bank.
The so-called foreign exchange speculation, refers to the forecast decline in foreign exchange rates will be the first to buy or sell after the rise in predicting the exchange rate after the first buy-sell a foreign currency (eg U.S. dollars) behavior.
In the form of foreign exchange speculation and Methods
Overall, foreign exchange speculation to only two forms:
The first, after the first buy to sell, that is, “buy more.” When speculators expect a currency to appreciate, just superior to the foreign currency exchange market when the price is relatively low, first to buy the currency until the currency exchange rate, it will be their selling. Such as: the dollar against the yen in February is one U.S. dollars equals 110 yen, speculators that the dollar will rise in April, he spent 1.1 million yen to buy 10000 USD, in April, as he expected, 1 U.S. dollar against the yen as 120 yen, investors will sell the hands of U.S. dollars, with 120 million yen, he earned a 120-110 = 10 million yen.
The second, the first sell-buy, namely, “short selling.” When speculators expect a currency to depreciate on the foreign currency in the foreign exchange market, superior to the relatively high prices, the first to sell the currency to the currency actually falling, and then buy the currency to earn the difference. Such as: the above example, the speculators that the dollar will depreciate in April, investors will be in the hands of 10,000 U.S. dollars sold the 110 million yen in April, as he expected, one U.S. dollar 100 yen, investors will be in the hands of yen selling, buying 11,000 U.S. dollars, he earned 11000-10000 = 1000 U.S. dollars.
In the forward foreign exchange market, foreign exchange futures market, foreign exchange speculation there are some differences in form, but the principle remains the case, readers can get to understand in the next chapter.
