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The exchange rates (also known as the foreign-exchange rate,
forex rate or FX rate) between two currencies specifies
how much one currency is worth in terms of the other. It is the value of a foreign nation’s currency in terms of the home nation’s currency.
For example an exchange rate of 91 Japanese yen (JPY, ¥) to the United States dollar (USD, $) means that JPY 91 is worth the same as USD 1.
The foreign exchange market is one of the largest markets in the world. By some estimates, about 3.2 trillion USD worth of currency changes hands every day.
Trading on margin means that you can buy and sell assets that represent more value than the capital in your account.
Forex trading is usually conducted with relatively small margin deposits.
This is useful since it permits investors to exploit currency exchange rate fluctuations which tend to be very small.
A margin of 1.0% means you can trade up to USD 1,000,000 even though you only have USD 10,000 in your account.
A margin of 1% corresponds to a 100:1 leverage (or “gearing”). (Because USD 10,000 is 1% of USD 1,000,000.)
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