What Is The Difference Between The Foreign Exchange Market And The Stock Market?
The Forex and the FX Market are other names the Foreign Exchange market is known by. Trade between two different countries, using different currencies is handled by the fx market. The FX market hung its first shingle inthe early 1970¥s, making it about 30 years old. The forex market does not deal with a particular business, but rather, it deals with the trading and selling of foreign currencies.
The biggest difference between the stock market and the forex market is mainly based on the ample trade that takes place in the forex market. There is a tremendous amount of money being traded on the forex every day,nearly three trillion dollars. This amount greatly exceedsany amount traded in the stock markets of any country in the world. The forex deals with banks, financial institutions and governments all around the world.
The forex market only deals with purchases that can easily be converted into cash, or with cash directly. The type of currency used and the country investors are in is of secondary importance, since the forex can make things run fast for everybody.
And also, the fact that the forex is a global operation, is another difference between the forex and the stock market. The power of the stock market is limited to thecountry it operates in. The stock market oversees tradingbetween businesses in one country, while the forex goes beyond that.
The stock market opens and closes following a business schedule. It follows a typical business schedule and it is closed for holidays and weekends. The forex is always open, to be able to cater to the needs of differentcountries located in different time zones. Because of time changes, when one stock market opens the other closes, and the forex remains open to be available to all.
Stock markets can only trade in the currency of thecountry they are in. The forex instead deals with multiple countries and currencies. Because of the fact that theforex is active using many different currencies marks the biggest difference between the forex and the stock market.