Which is the main source of income for brokerage firms.
Did you ever go to a money exchange shops to replace your local currency and get dollars, for example?
Suppose that you have a SR and I wanted to buy a $ two MEs What happens?
When you go to the money changers and ask him about the price of the dollar against the riyal will ask: buy or sell?
That is meant to know: Do you have a dollar and want to sell it and get a Real or have Real and want to buy the dollar?
If I asked him about the cases, it will tell you, for example:
Dollar against the Saudi riyal now: Sell: 3.65 buy: 3.50
What does that mean?
I mean, if you have Real and you want to buy dollars Vsepeek dollar that you pay 3.65 riyals.
But if you had a dollar and you want to buy Real will get for every dollar at 3.50 riyals.
Any Sepeek dollar at 3.65 riyals to the dollar.
And buy the dollar at a rate of 3.50 riyals obtained for every dollar.
May ask why there is a difference in price between the buying and selling?
This is because the difference is the interest earned by the cashier.
Why give you the dollar and the riyal takes you that did not benefit from it?
Will benefit from the dollar when buying from others at 3.50 riyals and sell it to others at 3.65 riyals.
It benefits if: 3.56 - 3.50 = .15 rials on every dollar sells for, and what he buys and sells large quantities of a lot of people would become such a slim edge large sum.
This is called the difference between the buying and selling price of a currency spread.
And brokerage firms to trade currency will deal with you as completely handles teller.
_ek Currency rate and buy from you at a slightly lower price and this difference is the profit.
So when you trade currencies, you will find that the price of any currency come in pairs: the price of the sale and purchase price.
For example: It would be the price of the euro against the dollar EUR / USD = .9500-9505
If you have euros and want to sell them and buy - you get - dollar, Vschtre you and pay you $ .9500.
But if you want to buy the euro and sell - pay - the dollar, you have to pay for every euro $ .9505.
A difference of $ .0005 will be the profit margin.
Called the purchase price of the coin ASK
Called the price you sell the coin BID
The method will be Offer ÔČíÉ Price thus:
BID ASK
EUR / USD .9800 .9805
GBP / USD 1.5235 1.5240
USD / JPY 123.25 123.30
USD / CHF 1.4828 1.4833
Table (1)
What does that mean?
Price as you know: is the amount owed from the second currency for one unit of the base currency.
ASK: means they ask you to pay $ .9805 for one euro, ie it euro _ek at $ .9805
BID: means that it offers you the amount of $ .9800 to get you one euro, that is, they buy you the euro at a price of $ .9800.
If
ASK: is the price at which it will buy you the base currency and sell - pay - the second currency.
BID: is the price at which it sells you the base currency and buy - you get - the second currency.
Notes here that the difference between the sale price and the purchase price in each currency is 5 points.
This means that: SPREAD = 5 POINTS
If we assume that you bought 1,000 euros depending on the rates listed in the table (1) will pay $ 980.5 interview
If you have to sell the 1000 euros immediately you will not sell at the same price I bought it, but you'll get an interview on 980 $ and had thus lost .5 $.
This difference is fully benefit brokerage firm as interest teller.
Currency prices in constant change up and down but always there remains a five-point difference between the purchase price and the selling price, and this difference is fixed profit for the brokerage firm.
Take the examples:
Example 1
Suppose you looked at the panel prices in the workstation and found as follows:
BID ASK
EUR / USD .9800 .9805
So what do you do?
The answer:
We expect the euro to rise it will be if we will have to buy euros to sell later at a high price.
Will price at which it will buy euro now is .9805 because the purchase price.
Where ASK is price at which it will buy the base currency and sell the second currency, and the base currency is the euro, always against the dollar.
If we will buy € 1 lot at .9805
If ratified expectations and the euro rose may look up to the plate in workstation prices after a period of time, you will find the price of the euro as follows:
BID ASK
EUR / USD .9870 .9875
You now have the euro and want to sell them at a higher price than the purchase price When you look at the price above, you will find that the sale price (ie the price at which to sell you) is .9870
Because BID is the price at which sells you the base currency and buy the second currency, and you have euros and want to sell, and the euro is always the base currency.
If you want to buy the euro, rather than to sell will buy at .9875 because the price at which it buys the base currency.
If you sell 1 lot euros which have at .9870 to order the company to sell when the price reaches this limit.
I bought 1 lot at .9805 and sold at .9870 and thus made a profit = 65 points profit.
That is, you won $ 650 if you trade in a regular account or $ 65 if you are trading in a mini account.
Example 2
Suppose you looked at the panel prices and yen found as follows:
BID ASK
USD / JPY 123.50 123.55
If you want to buy the yen now at any price will buy?
The answer:
Remember that ASK: is the price at which you buy in. base currency and sell the second currency.
And BID: is the price at which you sell in. base currency and buy the second currency.
And always knew that the dollar is the base currency against the yen and the franc.
When you want to buy yen (second currency) and sell the dollar (base currency), the purchase price will be the bottom of the BID.
The purchase price will be is 123.50.
Does that cause you some confusion in understanding?!!
There is nothing wrong with you initially take the following general rule:
General rule
If you want to buy the euro or the pound take the ASK price.
If you want to sell the euro or the pound take rate BID.
And on the contrary ..
If you want to buy the yen or the franc take price BID.
If you want to sell the yen or the franc takes the ASK price.
And some elastosis things will become very clear for you.
Take more examples:
Example 3:
Suppose that the franc on the plate prices as follows:
BID ASK
USD / CHF 1.4825 1.4830
They expected that the franc will rise 50 points in the future, what would you do?
The answer:
We expect that the franc will rise against the dollar any that the franc bullish market, if we will buy the franc at the current price in the hope of selling it later at a higher price.
When buying the Snstraeh franc rate BID because the price at which we sell the base currency and buy the second currency, and the second currency is CHF.
Will buy at 1.4825 franc.
Example 4:
Suppose that the price of the pound against the dollar now as follows:
BID ASK
GBP / USD 1.5235 1.5240
And predicted that the pound will fall 80 points, what will you do?
The answer:
We expect that the pound will fall against the dollar that Fairy bearish market, if we sell the pound at the current price in the hope that we buy it later at a lower price and keep the difference as profit.
When we want to sell Fairy now Senbaah at BID because the price at which we will sell the base currency, the pound, we will sell the pound at 1.5235.
Example 5:
Suppose that the price of the yen against the dollar on the price board Malata:
BID ASK
USD / JPY 122.08 122.13
And predicted that the yen will fall, what would you do?
The answer:
We expect that the yen will decline against the dollar, which means that the yen market bearish.
If we will sell the yen.
When we want sell yen Senbaah at ASK because the price at which we buy the base currency and sell the second currency, and the second currency is the yen.
We will sell the yen at 122.13.
As we mentioned that in all cases, no matter how prices have changed a fixed currency there is a difference between the sale price and the purchase price which is called SPREAD.
And vary among companies select the SPREAD Some of them are determined by 5 points and 4 points and 8 points.
In each case, the vast majority of brokerage firms have SPREAD has = 5 points.
Anjad justified to deal with being the SPREAD has more.
I also saw the price difference between buying and selling is the basis of income brokerage firms in the currency market, although I have found some difficulty in understanding what we explained the difference between the sale price and the purchase price, especially since there is a difference between the buy and sell currencies direct and indirect Vlatqlq, with some elastosis These concepts will become very clear for you and you do not need to return to this book later understood or applied.
Did you ever go to a money exchange shops to replace your local currency and get dollars, for example?
Suppose that you have a SR and I wanted to buy a $ two MEs What happens?
When you go to the money changers and ask him about the price of the dollar against the riyal will ask: buy or sell?
That is meant to know: Do you have a dollar and want to sell it and get a Real or have Real and want to buy the dollar?
If I asked him about the cases, it will tell you, for example:
Dollar against the Saudi riyal now: Sell: 3.65 buy: 3.50
What does that mean?
I mean, if you have Real and you want to buy dollars Vsepeek dollar that you pay 3.65 riyals.
But if you had a dollar and you want to buy Real will get for every dollar at 3.50 riyals.
Any Sepeek dollar at 3.65 riyals to the dollar.
And buy the dollar at a rate of 3.50 riyals obtained for every dollar.
May ask why there is a difference in price between the buying and selling?
This is because the difference is the interest earned by the cashier.
Why give you the dollar and the riyal takes you that did not benefit from it?
Will benefit from the dollar when buying from others at 3.50 riyals and sell it to others at 3.65 riyals.
It benefits if: 3.56 - 3.50 = .15 rials on every dollar sells for, and what he buys and sells large quantities of a lot of people would become such a slim edge large sum.
This is called the difference between the buying and selling price of a currency spread.
And brokerage firms to trade currency will deal with you as completely handles teller.
_ek Currency rate and buy from you at a slightly lower price and this difference is the profit.
So when you trade currencies, you will find that the price of any currency come in pairs: the price of the sale and purchase price.
For example: It would be the price of the euro against the dollar EUR / USD = .9500-9505
If you have euros and want to sell them and buy - you get - dollar, Vschtre you and pay you $ .9500.
But if you want to buy the euro and sell - pay - the dollar, you have to pay for every euro $ .9505.
A difference of $ .0005 will be the profit margin.
Called the purchase price of the coin ASK
Called the price you sell the coin BID
The method will be Offer ÔČíÉ Price thus:
BID ASK
EUR / USD .9800 .9805
GBP / USD 1.5235 1.5240
USD / JPY 123.25 123.30
USD / CHF 1.4828 1.4833
Table (1)
What does that mean?
Price as you know: is the amount owed from the second currency for one unit of the base currency.
ASK: means they ask you to pay $ .9805 for one euro, ie it euro _ek at $ .9805
BID: means that it offers you the amount of $ .9800 to get you one euro, that is, they buy you the euro at a price of $ .9800.
If
ASK: is the price at which it will buy you the base currency and sell - pay - the second currency.
BID: is the price at which it sells you the base currency and buy - you get - the second currency.
Notes here that the difference between the sale price and the purchase price in each currency is 5 points.
This means that: SPREAD = 5 POINTS
If we assume that you bought 1,000 euros depending on the rates listed in the table (1) will pay $ 980.5 interview
If you have to sell the 1000 euros immediately you will not sell at the same price I bought it, but you'll get an interview on 980 $ and had thus lost .5 $.
This difference is fully benefit brokerage firm as interest teller.
Currency prices in constant change up and down but always there remains a five-point difference between the purchase price and the selling price, and this difference is fixed profit for the brokerage firm.
Take the examples:
Example 1
Suppose you looked at the panel prices in the workstation and found as follows:
BID ASK
EUR / USD .9800 .9805
So what do you do?
The answer:
We expect the euro to rise it will be if we will have to buy euros to sell later at a high price.
Will price at which it will buy euro now is .9805 because the purchase price.
Where ASK is price at which it will buy the base currency and sell the second currency, and the base currency is the euro, always against the dollar.
If we will buy € 1 lot at .9805
If ratified expectations and the euro rose may look up to the plate in workstation prices after a period of time, you will find the price of the euro as follows:
BID ASK
EUR / USD .9870 .9875
You now have the euro and want to sell them at a higher price than the purchase price When you look at the price above, you will find that the sale price (ie the price at which to sell you) is .9870
Because BID is the price at which sells you the base currency and buy the second currency, and you have euros and want to sell, and the euro is always the base currency.
If you want to buy the euro, rather than to sell will buy at .9875 because the price at which it buys the base currency.
If you sell 1 lot euros which have at .9870 to order the company to sell when the price reaches this limit.
I bought 1 lot at .9805 and sold at .9870 and thus made a profit = 65 points profit.
That is, you won $ 650 if you trade in a regular account or $ 65 if you are trading in a mini account.
Example 2
Suppose you looked at the panel prices and yen found as follows:
BID ASK
USD / JPY 123.50 123.55
If you want to buy the yen now at any price will buy?
The answer:
Remember that ASK: is the price at which you buy in. base currency and sell the second currency.
And BID: is the price at which you sell in. base currency and buy the second currency.
And always knew that the dollar is the base currency against the yen and the franc.
When you want to buy yen (second currency) and sell the dollar (base currency), the purchase price will be the bottom of the BID.
The purchase price will be is 123.50.
Does that cause you some confusion in understanding?!!
There is nothing wrong with you initially take the following general rule:
General rule
If you want to buy the euro or the pound take the ASK price.
If you want to sell the euro or the pound take rate BID.
And on the contrary ..
If you want to buy the yen or the franc take price BID.
If you want to sell the yen or the franc takes the ASK price.
And some elastosis things will become very clear for you.
Take more examples:
Example 3:
Suppose that the franc on the plate prices as follows:
BID ASK
USD / CHF 1.4825 1.4830
They expected that the franc will rise 50 points in the future, what would you do?
The answer:
We expect that the franc will rise against the dollar any that the franc bullish market, if we will buy the franc at the current price in the hope of selling it later at a higher price.
When buying the Snstraeh franc rate BID because the price at which we sell the base currency and buy the second currency, and the second currency is CHF.
Will buy at 1.4825 franc.
Example 4:
Suppose that the price of the pound against the dollar now as follows:
BID ASK
GBP / USD 1.5235 1.5240
And predicted that the pound will fall 80 points, what will you do?
The answer:
We expect that the pound will fall against the dollar that Fairy bearish market, if we sell the pound at the current price in the hope that we buy it later at a lower price and keep the difference as profit.
When we want to sell Fairy now Senbaah at BID because the price at which we will sell the base currency, the pound, we will sell the pound at 1.5235.
Example 5:
Suppose that the price of the yen against the dollar on the price board Malata:
BID ASK
USD / JPY 122.08 122.13
And predicted that the yen will fall, what would you do?
The answer:
We expect that the yen will decline against the dollar, which means that the yen market bearish.
If we will sell the yen.
When we want sell yen Senbaah at ASK because the price at which we buy the base currency and sell the second currency, and the second currency is the yen.
We will sell the yen at 122.13.
As we mentioned that in all cases, no matter how prices have changed a fixed currency there is a difference between the sale price and the purchase price which is called SPREAD.
And vary among companies select the SPREAD Some of them are determined by 5 points and 4 points and 8 points.
In each case, the vast majority of brokerage firms have SPREAD has = 5 points.
Anjad justified to deal with being the SPREAD has more.
I also saw the price difference between buying and selling is the basis of income brokerage firms in the currency market, although I have found some difficulty in understanding what we explained the difference between the sale price and the purchase price, especially since there is a difference between the buy and sell currencies direct and indirect Vlatqlq, with some elastosis These concepts will become very clear for you and you do not need to return to this book later understood or applied.
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