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HomeFOREXIs Forex Margin Trading Legal?

Is Forex Margin Trading Legal?

Forex margin trading is a legal activity. Regarding foreign exchange margin trading, the ” Regulations of the People’s Republic of China on Foreign Exchange Administration ” stipulates that the state shall not restrict regular international payments and transfers, the foreign exchange receipts and payments or foreign exchange business activities of domestic institutions and domestic individuals, and the foreign exchange of foreign institutions and individuals in China. The provisions of this Regulation shall apply to income and expenditure or foreign exchange business activities.

Foreign exchange margin trading, also known as foreign exchange speculation , refers to signing a contract with a (designated investment) bank, opening a trust investment account, depositing a sum of money (margin) as a guarantee, and setting credit by the (investment) bank (or brokerage). Operation limit (ie, 20-400 times the leverage effect, more than 400 times is illegal). Investors can freely buy and sell spot foreign exchange of the same value within the quota, and the profit and loss caused by the operation will be automatically deducted or deposited from the above investment account, so that small investors can use smaller funds to obtain larger transaction quotas , like global capital, enjoy the use of foreign exchange transactions as a risk avoidance and create profit opportunities in exchange rate changes.

Generally speaking, foreign exchange speculation is an investment behavior. Foreign exchange margin trading is that investors conduct foreign exchange transactions with trusts provided by banks or brokers. It makes full use of the principle of leveraged investment, a forward foreign exchange trading method between financial institutions and between financial institutions and investors . In the transaction, investors only need to pay a certain margin to conduct 100% transactions, so that those investors with a small amount of funds can also participate in foreign exchange transactions in the financial market.

Eight advantages of investing in foreign exchange:

(1) The investment objective is the national economy, not the performance of the listed company;

(2) Foreign exchange is a bilateral transaction, which can be bought up or sold down, and the restriction can be avoided;

(3) It can be traded in the form of margin, and the investment cost is light;

(4) The transaction volume is large, and it is not easy to be controlled by large households;

(5) T+0 transactions, unlimited trading at any time;

(6) Be able to grasp the range of losses (set stop loss), and will not incur greater losses because there is no buyer or seller to undertake;

(7) 24-hour trading, and trading can be carried out at any time;

(8) High interest rate of return (stocks only pay dividends at most four times a year, while foreign exchange investors can enjoy interest every day if they hold high-interest currency contracts).

Reminder: Magical scene! Will Eurozone Inflation Overtake the U.S. in the Next Decade? For specific operations, please pay attention Reelfinancial.com . The market is changing rapidly, investment needs to be cautious, and the operation strategy is for reference only.