What is a spot transaction?
Forex trading online is the online platform where the trading of currencies takes place. Forex is one of the largest markets in the world that enables traders to trade at any time with their own decisions. Currencies are bought or sold in pairs in the forex market.
It is the difference in the money value between these pairs that offer a profit or loss to the traders. Keep in mind that most of the trading in the forex market takes place in bulk. Forex trading online offers the spot market for traders where the delivery takes place within 2 business days.
Most of the currency pairs associated with the forex trading online follow this rule, except for the pair USD/CAD, which takes place within 1 business day. All the days excluding Saturday, Sunday, and global holidays are considered as business days.
The forex market is open 24 hours during business days, enabling traders to make their orders at any time. Also, the legal holidays in the country of either pair of currencies are considered a holiday. During the seasons of Christmas and Easter, the spot trade may take up to around 6 days to settle. Keep in mind that the funds have to be provided only during the time of settlement.
There is no need to provide it during the time of the transaction. Among the various trading currencies, the US dollar is the most popular and active one. Mostly, the US dollar gets traded with the euro, making the euro the most counter-traded currency in the forex market.
These 2 currencies are succeeded by the Japanese yen, British pound, and Swiss franc. There are different factors that determine the market value of the currency. The growth and strength of the economy, the interest rate offered, speculations, etc… are some of these factors. It is these factors and the timing at which the trading orders are placed that determines the profit or loss of the trader.