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Foreign exchange trading is the simultaneous buying of one currency and selling of another. Currencies are quoted in pairs i.e. Euro vs. US Dollar. When one currency increases in value it means it strengthens against another and the value of the other decreases.

Foreign exchange is traded on margin. This is a more efficient use of your capital because you only have to allocate a very small proportion of the value of your position to secure a trade, while maintaining full exposure to the market. In effect you are able to magnify the returns on your investment. However it is important to note that although if the markets move in your favor profits will be magnified, if the position turns against you your losses will also be magnified.

Foreign exchange is an over-the-counter (OTC) market which means trades do not take place through a centralised exchange. This means that foreign exchange trading can and does take place around the world 24 hours a day.

Trading starts in New Zealand followed by Sydney, and moves around the world to Tokyo, London, and New York. Unlike any other financial markets, investors can respond to currency fluctuations caused by economic, political and social events at the time they occur, without having to wait for markets to open.

The foreign exchange market is the most heavily traded financial market in the world with over 4 Trillion USD traded daily and with so many market percipients trading over 24 hours; the foreign exchange market is more liquid than any other financial market. This means clients have access to size, tight dealing spreads and lower margin rates than other financial market. It also means foreign exchange markets are less prone to gapping than less liquid markets such as equities.

IKON provides 24-hour services on-line and via telephone, servicing our clients' needs from order entry through to execution, confirmation and concluding with currency delivery.

Clients may choose to trade through one of our highly experienced traders on our 24 hour phone desk or through one of our electronic offerings.

Forex trading terms

Bid: The rate at which you can sell the base currency, in our case the euro, and buy the quote currency, in our case the US dollar.

Ask(or offer): The rate at which you can buy the base currency, in our case the euro, and sell the quote currency, in our case the US dollar.

Spread: The difference between the bid and the ask prices.

Currency rate: The value of one currency expressed in terms of another. The fluctuation rate depends on numerous factors including the supply and demand on the market and/or open market operations by a government or by a central bank.

Lot: Usually, the contract size is based on a lot system, and for most currency pairs 1 lot is 100,000 units of a base currency.

Swap rate: The charge or credit applied to all open positions subject to rollover.


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Risk Warning:Trading options, and commodities is risky and not suitable for everyone. All of these products are leveraged, and you can lose more than your initial deposit. Don't trade more than you can afford to lose. The products may not be suitable for all investors. Please ensure that you fully understand the risks involved. View our full risk warning here.