What is the difference between real trading and virtual trading in foreign exchange?

1. Individual firm foreign exchange transactions

Individual firm foreign exchange transactions refer to individual investors entrusting banks to exchange one freely convertible foreign currency into another freely convertible foreign currency. Investors can convert between different currencies, while bearing the exchange rate risk, obtain the benefits brought about by exchange rate fluctuations.

The characteristics of real offer trading relative to margin trading (commonly known as "virtual offer" trading)

① Investors can only invest with actual funds, and cannot enlarge the transaction amount;

② Investors can only sell the currency they hold.

The characteristics of foreign exchange real offer trading relative to stock trading

① For T+0 transactions, multiple transactions can be made on the same day;

② 24-hour continuous trading without time limit;

③The minimum amount for a single transaction is only $50.

Customers only need to open a foreign currency account in the bank, and sign the "Risk Disclosure Statement", "Foreign Exchange Firm Offer Transaction Terms" and other documents to activate the personal firm offer foreign exchange transaction function.

Foreign exchange trading methods adopted by various banks

① Over-the-counter transactions, where investors fill in a written entrustment to conduct transactions at the counter designated by the bank;

②Telephone trading, investors trade by dialing the customer service number of the bank and following the voice prompts;

③Online banking, where investors log in to the website of the bank where they opened their account and conduct transactions online;

④Mobile banking, investors conduct transactions through the mobile banking service provided by the account opening bank.

2. Personal virtual foreign exchange transactions

Fake foreign exchange trading, also known as foreign exchange margin trading, margin trading. Refers to investors and financial companies (banks, dealers or brokers) specializing in foreign exchange trading, signing a contract on entrusted foreign exchange trading, and paying a certain percentage (generally not exceeding 10%) of the transaction margin, then they can be financed at a certain financing multiple. Buy and sell foreign exchange worth 100,000, hundreds of thousands or even millions of dollars.

Compared with foreign exchange firm offer trading, the characteristics of foreign exchange margin trading

①The transaction amount is magnified several times, and the benefits and risks increase accordingly

At present, the foreign exchange margin transaction opened by Bank of China Shanghai Branch can enlarge the transaction amount by 10 times, and the margin transaction opened by some foreign financial institutions can sometimes be enlarged by 100 times or even higher; take the 10-fold enlarged margin transaction as an example, the exchange rate fluctuates by 1% There may be a gain or loss of 10% of the principal;

②Two-way operation

Margin trading can be both bought and sold, and is not restricted by the currency of funds. That is to say, there are also opportunities to make money in bull markets and bear markets, and the operation is more flexible;

③It is more suitable for short-term operation

At present, only a small number of banks in my country are allowed to start or try out foreign exchange margin trading business. However, with the gradual relaxation of policies and the maturity of investors, foreign exchange margin trading will become the mainstream of the foreign exchange market just like abroad.