What is buying forex

What is buying forex

07/05/ · "Forex" stands for "foreign exchange"and refers to the buying or selling of one currency in exchange for another. It's the most heavily traded market in the world because people, businesses, and countries all participate in it, and it's an easy market to get into without much capital 04/02/ · Buying and selling forex pairs involves estimating the appreciation/depreciation in value of one currency against the other. This could involve fundamental or Estimated Reading Time: 4 mins 31/03/ · Forex (FX) market is a global electronic network for currency trading. Formerly limited to governments and financial institutions, individuals can now directly buy and sell currencies on forex

Forex buying and selling meaning

TT selling and TT buying rates are decided by particular banks based on their position with that particular currency with respect to home currency. USD can be bought or sold by using major currencies of the world by using TT buying or selling rate.

TT Buying Rate. If you want to convert the foreign currency into domestic money, you have to buy a TT, the TT buying rate inward remittances applicable to them.

Telegraphic transfer, money transfer, demand draft, which are generally denominated in foreign currency converted into Indian currency or domestic currency. So, we have to purchase what is called TT buying. Conversion of proceeds of instrument, many export oriented instruments, many foreign bills, those who are denominated in foreign currency converts into domestic currency through TT buying rate. Similarly, if you want to cancel outward remittances, suppose you have booked a foreign DD, foreign currency DD, but you want to convert into Indian currency or cancel it, then you have to purchase what is called a TT buying rate.

So, TT buying rates applicable to inward remittances, foreign currency demand draft, foreign currency money transfer, conversion of proceeds of foreign currency denominated instrument, cancellation of outward remittances in the form of DD, TT, MT. TT selling rate, what is buying forex. If you want to send foreign currency to outside that is from domestic economy, the foreign currencies are going outward to other country, then you have to sale a TT. So, if I want to send US dollar to any US what is buying forex in US, then I have to convert the domestic rupee into US dollar, that time I have to sell a TT.

So, all outward remittances transaction which are generally converted by paying domestic money into foreign currency are called TT selling rate. So, outward remittances, telegraphic transfer, money transfer, foreign currency denominates DD that is demand draft, conversion of proceeds of instrument that is any instrument in domestic money converted into a foreign currency, cancellation of inward remittances, if you want to convert any foreign domestic DD, TT, MT into foreign currency, what is buying forex, then TT selling rate applicable, what is buying forex.

If you want to import something, then you have to sell TT. TT selling rate applicable to all outward transaction in which any foreign currency purchased by paying domestic currency. Bills are export import proceeds, what is buying forex. Bills buying rate is nothing what is buying forex inward remittances, bill selling rate nothing but outward remittances.

What is buying forex currency converted into domestic currency through bills buying rate; domestic currency converted into foreign currency through bill selling rate. Here bills are export import bill, and any other kind of foreign, foreign currency denominated instruments. The ones we are interested in are telegraphic transfer buying TTB rates and telegraphic transfer selling TTS rates.

The TTB rate is the rate at which the bank will what is buying forex foreign currency to India, into INR for example. A telegraphic transfer TT is an electronic method of transferring funds utilized primarily for overseas wire transactions. These transfers are used most commonly in reference to Clearing House Automated Payment System CHAPS transfers in the U.

banking system. Telegraphic transfers are also what is buying forex as telex transfers, abbreviated TT; they can also refer to other types of transfers.

The payment abbreviation, as is often the case, is utilized to speed discussions in professional circumstances. Telegraphic transfers are usually fairly expensive due to the fast nature of the transaction. Generally, what is buying forex telegraphic transfer is complete within two to four business days, depending on the origin and destination of the transfer, as well as any currency exchange requirements.

Payment of demand drafts, mail transfers, telegraphic transfers, etc. Foreign bills collected. Cancellation of foreign exchange sold earlier. For instance, the purchaser what is buying forex a bank draft drawn on New York based bank may later on request the bank to cancel the draft and refund the money to him.

In such case, the bank will apply the TT buying rate to determine the rupee amount payable to the customer. The method of calculating TT buying rate is shown in Table 5. It is assumed that the foreign exchange to be purchased is US dollars. Bill buying rate to be apply when a foreign bill is purchased.

When a bill is purchased the rupee equivalent of the bill value is credited what is buying forex the exporter account immediately. However, the proceeds will be realised by the bank after the bill is presented to the drawee at the overseas centre. In the case of a usance bill, the proceeds will be realised on the due date of the bill which includes the transit period and the usance period of the bill.

If a sight bill on London is purchased, the realisation will be after a period of about say 25 days transit period. The bank would be able to dispose of the foreign exchange only after this period. Therefore, what is buying forex, the rate quoted to the customer would be based not on the spot rate in the interbank market, but on the interbank forward rate for 25 days. Likewise, if the bill purchased is 30 days usance bill, then the bill will realise after about 55 days 25 days transit plus 30 days usance bill period.

Therefore, the bank would be able to dispose of foreign exchange only after 55 days; the rate to the customer would what is buying forex based on the interbank forward rate for 55 days. Two points need noting in loading the bills buying rate with forward margin, what is buying forex. First, forward margin is normally available for periods of a calendar month and not for 25 days etc. Secondly, forward margin may be at a premium or discount. Premium is to be deducted to the spot rate and discount should be added to the spot rate for direct quotations, in home rate.

While making calculations, the bank will see that the period for which forward margin is loaded is beneficial to the bank. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. What is TT selling and TT Buying? It is basically rates at which other currencies are bought or sold in terms of home currency. Leave a Reply Cancel reply Your email address will not be published.

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The Basics of Forex Trading

23/04/ · What buying and selling on forex means When it comes to purchasing and selling pairs on forex, this entails estimating an appreciation or depreciation concerning the value of one type of currency compared to another type of blogger.comted Reading Time: 6 mins 08/06/ · You are trading a “scoreboard” of FX rates that your forex broker displays to you on its trading platform. For example, if you think EUR/USD will go up, you click “Buy”. When you “buy”, you are placing a bet with your forex broker that the PRICE will go up from the current price. You don’t actually own or take possession of currencies Trading forex involves the buying of one currency and simultaneous selling of another. In forex, traders attempt to profit by buying and selling currencies by actively speculating on the direction currencies are likely to take in the future. World’s Major Currencies