As an investor in the stock market, if you think that you do not need too much of hand-holding and you can do your own research, trading through a discount brokerage is the right option for you. Discount brokers offer to conduct the stock trading for you without providing you with financial advice and without influencing your investment decisions. The most important benefit that you derive out of investing though a discount brokerage is that they charge considerably less than the usual full-service brokerages. If new to the stock market, it is always advisable to go for “full- services, as this helps you to take wise decisions and gain from the insights of an experienced broker. As you become more conversant with the market and its trends, there is not a better option than a discount brokerage.
Posted by Ashish Hadke at 3:39 PM 0 comments
Labels: Discount Brokerage
Sunday, April 19, 2009
ROLE OF THE EXCHANGE RATE
The exchange rate is a price—the number of units
of one nation’s currency that must be surrendered
in order to acquire one unit of another nation’scurrency. There are scores of “exchange rates”
for the U.S. dollar. In the spot market, there is an
exchange rate for every other national currency
Posted by Ashish Hadke at 3:09 PM 0 comments
Labels: ROLE OF THE EXCHANGE RATE
WHAT “FOREIGN EXCHANGE” MEANS
“Foreign exchange” refers to money denominated
in the currency of another nation or
group of nations. Any person who exchanges
money denominated in his own nation’s
currency for money denominated in another
nation’s currency acquires foreign exchange.
That holds true whether the amount of the
transaction is equal to a few dollars or to
billions of dollars; whether the person
involved is a tourist cashing a traveler’s check
in a restaurant abroad or an investor
exchanging hundreds of millions of dollars for
the acquisition of a foreign company; and
whether the form of money being acquired
is foreign currency notes, foreign currencydenominated
bank deposits, or other shortterm
claims denominated in foreign currency.
A foreign exchange transaction is still a shift
of funds, or short-term financial claims, from
one country and currency to another.
Thus, within the United States, any money
denominated in any currency other than theU.S. dollar is, broadly speaking, “foreign
exchange.”
Foreign exchange can be cash, funds available
on credit cards and debit cards, traveler’s checks,
bank deposits, or other short-term claims. It is
still “foreign exchange” if it is a short-term
negotiable financial claim denominated in a
currency other than the U.S. dollar.
But, in the foreign exchange market described
in this book—the international network of major
foreign exchange dealers engaged in high-volume
trading around the world—foreign exchange
transactions almost always take the form of an
exchange of bank deposits of different national
currency denominations. If one bank agrees to
sell dollars for Deutsche marks to another bank,
there will be an exchange between the two parties
of a dollar bank deposit for a DEM bank deposit.
In this book, “foreign exchange” means a bank
balance denominated in a foreign (non-U.S.
dollar) currency.
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