What Is The Difference Between The Foreign Exchange Market And The Stock Market?
1. 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 in
the 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.
2. 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 exceeds
any 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.
3. 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.
4. 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 the
country it operates in. The stock market oversees trading
between businesses in one country, while the forex goes
beyond that.
5. 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 different
countries 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.
6. Stock markets can only trade in the currency of the
country they are in. The forex instead deals with multiple
countries and currencies. Because of the fact that the
forex is active using many different currencies marks the
biggest difference between the forex and the stock
market.