- 1.What is the spread?
In foreign exchange transactions, there are quotations from two parties, which consist of the ask price and the bid price. The bid price represents the price that you can buy based on the base currency (and at the same time sell the non-base currency), while the ask price is the price that you can sell based on the base currency (and meanwhile buy the non-base currency). The difference between the bid price and the ask price is the spread, through which traders make profits in businesses.
- 2.What is the leverage?
The leverage of foreign exchange is to allow customers to trade with less money. Leveraged trading establishes an available ratio based on each dollar in your account. The money you invest in the transaction is actually the money that takes risks. It is called a "margin" or a risk-taking fund. For example, if you invest $100 with a leverage ratio of 1:100, then you have $100 at your disposal for each dollar in your account investment fund (i.e., margin). If you start trading with $100, you can do transactions with a maximum value of $10,000 (100x100).
- 3.What is a lot?
1 standard hand = 100,000 units. The smallest unit you can invest in at Novox is 0.01 hands.
- 4.The reasons for the change of exchange rate
Foreign exchange is traded on the open market, just like stocks, bonds, computers, cars and many other goods and services. The value of money fluctuates with the fluctuation of its supply and demand. An increase in the supply or decrease in demand of a currency may lead to a decrease in the value of that currency, and so on.
- 5.What is the margin?
Margin is the amount you need to pay in advance to open a position. This amount will be refunded to your account after you close your position. The margin is based on the exchange of the base currency of the pair of currencies into US dollars. The size of the transaction volume and the leverage are designed in the calculation. If you don't have enough margin available, you can't open a new position. The margin available on your account is the margin you can use to trade.