How can I trade

 A you can see from the

London vacation example,currency
exchange rates fluctuate. As the
value of one currency rises or falls
relative to another, traders decide
to buy or sell currencies to make
profits. Retail customers also
participate in the forex market,
generally as speculators who are
hoping to profit from changes in

currency rates.


Foreign currency exchange rates
may be traded in one of three ways:
On an exchange that is regulated
by the Commodity Futures
Trading Commission (CFTC). For
example, the Chicago Mercantile
Exchange offers currency futures
and options on futures products.
Exchange-traded currency futures
and options provide their users
with a liquid, secondary market
for contracts with a set unit size,
a fixed expiration date and
centralized clearing.
On an exchange that is
regulated by the Securities and
Exchange Commission (SEC).


For example, the Philadelphia
Stock Exchange offers options on
currencies (i.e., the right but not
the obligation to buy or sell a currency
at a specific rate within a
specified time). Exchange-traded
options on currencies have characteristics
similar to exchangetraded
futures and options (e.g.,a
liquid, secondary market with a
set size, a fixed expiration date
and centralized clearing).
In the off-exchange, also
called the over-the-counter
(OTC) market. A retail customer
trades directly with a counterparty
and there is no exchange or
central clearinghouse to support
the transaction.