The foreign exchange transactions can be carried out in four different ways. The first is called spot market,
the second forward Outright and swaps, thirdly through options and finally betting on the spread.
Making foreign exchange transactions has certain advantages that other types of investment hasn’t. The
foreign exchange market operates 24 hours a day due to the overlap between the major markets of
Europe, Asia and the United States.
Over the last thirty years, and particularly after the oil crisis in 1973, foreign exchange transactions have
become very popular. The liquidity occurred in the financial markets because of the excessive petrodollars meant that many people saw in the speculation a way to increase their profits. Of course not all of them went well, however as years went by foreign exchange transactions have generated new jobs and have become, for many people, a way of living.
With the advent of technological innovations the time to carry out operations in foreign currency could be extend, currently the time range to conduct transactions in foreign currencies goes from Sunday at 23:00 pm up to Friday at 23:00 hours .
Another advantage of operating in foreign currency, is that these offer a spread (the difference between
the purchase price and selling price), much lower than the stock market. Historically high monetary spreads
were only for those persons or institutions that conduct operations of 1 million dollars or more, but now it
has been extended to investors who trade smaller quantity of money.