Benefits of Investing in Foreign Exchange

An Opportunity -WHY INVEST?

Risk Limitation:

  1. Counter hidden risk to conventional trading instruments e.g. recession, inflation, interest  rate cuts.
  2. Mitigate against depreciation of US dollar savings in the long-term.
  3. Insurance against major political / economic events on market movements.

Loss Inflation:

  1. Short-selling as a technique to offset currency depreciation in spot currency market.
  2. Leveraged trading means low capital outlay as against return on investment.

Satisfaction in FX – Benefits Of Trading Forex

1. Opportunity:


  1. Global Market

  2. High Value Market

  3. Modern Equipment

2. Satisfaction:

The assurance of a one to one working relationship with your broker who knows that you are an individual with unique investment needs.

3. Risk / Return Ratio:

Every investment has a certain amount of risk. However, our sophisticated facilities provide worldwide information at our fingertips, keeping us alert to impending dangers. With the personal service and support of our qualified professionals we can reduce the risk/ return ratio and increase satisfaction.

4. Leverage:

The mode of payment is done through margin system where the investor may gain control over huge amounts or volume of foreign currency by depositing a small percentage of the actual value. That small percentage of liquid capital is called the margin.

Example:     US Dollar at .9120 Euro
For a contract size of 100,000, the dollar value of the
transaction is computed as follows.

.9120 x 100,000 = $ 91,200

The FOREX investor does not need the full $ 91,200.61 to enable him to transact that amount. The margin requirement is only US$2,000 under normal market conditions.

5. High Return on Investment (ROI):

%Return on Investment  =    Profit      x 100

Principal

Due to leverage, the investment return is expected to be much greater than the typical
stock or bond investment profit. Consequenty even minor fluctuations of currencies can
result in high returns.

Example: For Euro -  From    .9120     to       .9250        =   Difference  $ 1,300
($ 91,200   )       ($ 92,500)

% Return based on                      $ 1,300    x  100 =   65%

company’s margin requirement     $ 2,000

% Return based on                      $ 1,300    x 100 =   13%

client’s usual margin reserve         $10,000

The amount of $ 1,300 is computed from a single round-turn transaction. It should be noted also that the above percentages are not annualized since no timeframe has been incorporated into the equation.

6. Fast Rate of Return:

Foreign Exchange Trading may be done twenty-four hours around the clock without any time zone barrier. Unconsummated transactions initiated in America may continue through Pacific, Asian and European Forex markets. Capital utilization is maximized twenty-four hours around the clock in a freely-fluctuating market around the world.

7. Liquidity:

Trading twenty-four hours daily, in foreign exchange, assure market liquidity with the availability of willing buyers and sellers of any foreign currency, (EURO, JPY, GBP and CHF) at any rate. Margins for trading do not have maturity. Foreign currency buying or selling may be terminated at client’s option at any time and for any reason.

8. Low and Fixed Cost of Transaction:

Fixed service fees are charged only after finishing one complete cycle of buy and sell. There is no extra Management Fee being collected.

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