Contracts, also called trading and margin trading, trading, refers to the investors and the specialty is engaged in the financial company, trader or broker (bank), signed a trading contract, pay a certain ratio (generally no more than 10%) of margin trading, can be in a certain financing trade in 100000, hundreds of thousands or even millions of foreign exchange.
The main advantage of spot contracts is that they save money on investment.
When buying or selling foreign exchange in the form of a contract, the investment amount is generally not more than 5% of the contract amount, and the profit or loss paid is calculated on the basis of the whole contract amount.
The amount of a foreign exchange contract is determined according to the type of foreign currency.
This form of contract buying and selling simply makes a written or verbal commitment to a certain price of a certain foreign currency, and then waits for the price to rise or fall before settling the purchase and selling, making a profit from the change in the spread, but also bearing the risk of loss.
