What is Forex? Part 3

What is Forex?

Like some other markets, you can find a bid/offer spread. This is the difference between the buying and selling price. With the major currency pairs, the difference in the buy and sell price is typically very low and will only be a pip or two. The sell price is called the "ask" or "offer" while the buy price is referred to as the "bid".

What is Forex?

Not much of this will apply to retail customers because they will usually use a broker for conduction trades. When using a broker, customers will have a spread up to around 3-20 pips. The brokers allow the client to use a hefty amount of margin so they are able to trade much larger amounts than they could afford on their own. Brokers are not regulated by the U.S. Securities and Exchange Commission so they do not have to follow the same margin limitations that stock brokerages follow. Brokers typically don't charge margin interest because currency trades are usually settled in 2 days or less.

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Link What is Forex Market?

http://www.what-is-forex.non-mlm.com