What is the difference between foreign exchange margin and foreign exchange actual trading?

　　foreign exchangeMargin trading is a hedging transaction that must be closed after opening a position (of course, it's okay if you don't close your position for the rest of your life, but it's almost impossible), onceForeign exchange transactionsIt requires two processes to complete: buying and selling (opening and closing). In addition, margin trading has a amplifying effect, such as when you use2US dollars can be traded on the market100The trading of the US dollar has a significant leverage effect and high risk and return.

Foreign exchange spot trading is a one-way transaction and does not require hedging. For example, if you buy Japanese yen in US dollars, the transaction ends, and you can no longer engage in subsequent transactions without affecting your funds. In addition, actual trading is100%Funds, without leverage, have much lower risks than margin trading.
The key to real trading lies in being "real". Traders must hold a sufficient amount of one currency in order to entrust banks to exchange it for another currency according to the real-time exchange rate in the international foreign exchange market plus the bank's handicap. What is the financing ratio for the actual offer0. The key to margin trading lies in "virtuality". Traders can use financing ratios, up to400：1Buy and sell larger contracts with smaller margin.
Another difference between a real offer and a margin is the spread. The difference in the actual price is16-40Between points, while the margin spread is mostly between3-11Between points. Real trading can only be done long (buy), not short (sell), while margin can be done long or short.


Example:
Assumption: In1USD exchange135.00Buy Japanese yen when in Japanese yen
Real price trading purchase12，500，000The Japanese yen needs to be92592.59dollar;
Purchase through margin trading12，500，000The Japanese yen contract requires1000dollar
If the yen exchange rate rises100Point:
Profit from actual buying and selling transactions:680.00US dollars; Profit margin:680/92592.59=7.34%
Profit from margin trading:746.00US dollars; Profit margin746/1000=74.6%
If the yen exchange rate falls100Point:
Losses from actual buy sell transactions:680.00US dollars; Loss rate:680/92592.59=7.34%
Margin trading losses:746.00US dollars; Loss rate746/1000=74.6%


From the above, it can be observed that the difference in profit and loss amounts between actual buying and selling and margin trading is the difference in the amount of funds received. The actual investment for buying and selling should be9It takes over ten thousand dollars to buy12，500，000Japanese yen, while the form of margin only requires1000USD, the difference in investment amount between the two90Multiple times. Obviously, adopting a contractual form of buying and selling is beneficial for investors: investing less, producing more, and using smaller funds to gain more profits. It's what people often say "four quantities and a thousand pounds"!

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