Where the bulk of forex trading takes place
Interbank market
Buying and selling currency pairs based on short-term price movements
Speculation
Where does the forex day start?
Auckland/Wellington
The majors comprise what percentage of all trades?
75%
Contracts to buy or sell a certain asset at a specified price on a future date
Currency futures
The buyer has the option, but not obligation, to buy or sell at a specified price on the option’s expiration date
Currency Options
allow you to speculate through a managed fund instead of placing individual trades
Currency ETFs
OTC market with no central trading exchange. It’s only for institutional traders.
Spot FX
OTC market for retail traders to speculate on the movement of exchange rates with access granted by forex brokers
Retail Forex
What two ways to trade forex are illegal in the U.S.?
Spread bets & CFDs
Measures the change in value between two currencies
Pip
Tenth of a pip
Pipette
Number of currency units you buy/sell
Lots
What lot size is 100 units?
Nano
What lot size is 1,000 units?
Micro
What lot size is 10,000 units?
Mini
What lot size is 100,000 units?
Standard
How to calculate pip value when USD is base currency
(.0001 / exchange rate) x lot size
Deposit required by the forex broker
Margin
What are the four trading sessions?
Sydney
Tokyo
London
New York
In what months do the opening hours change?
March
April
October
November
This city is considered the forex capital of the world
London
What are the hours of New York’s morning session?
8am — 12 pm EST
What are the hours of New York’s lunch session?
12pm — 1pm EST
