Home | Sitemap

Louisallenassoc.com

Management Skills

Strategic Planning

Management People

Resources

Directory

Articles

Forex As an Asset Class and Financial Instrument

Forex has always been classified as an asset and an instrument of financial transaction including both the spot and futures market. By one argument, the forex market makes a pretty much bigger turn over on a daily basis than the commodities and services trade although conceptually forex is there to facilitate the latter two. Need any more evidence for forex's status as financial instrument and an asset class of its own right? Sequentially, the logic goes that any financial instrument can be thought of as fit to be an asset class. So What Is A Financial Instrument? Any document, either virtual or real, which is assigned some monetary value and legally tradeable in the market as a package of an asset, is a financial instrument. The most traded one amongst all financial instruments is the equity based one.

Plain vanilla is an example of simplest financial instruments which has a simple strike price and expiration date. This option is devoid of advanced features but optionally there can be what is known as a knock-in option which activates the instrument only if the underlying stocks strike a preset price. But coming back to the discussion of forex as an asset class, the overall foreign exchange traded daily has jumped by 38% between April 2005 and April 2006 and has more than doubled since 2001. One significant reason that can be attributed to this is growing acceptance of forex as asset class strongly backed up by the fund management assets such as hedge funds and pension funds. On the same breath, one can not negate the advent of easier internet based retail trading platforms which pitched into attract large volumes. We have said that forex is an asset class.

The asset class is basically categorized as debt based and equity based depending on whether the investor gets to own the asset or not. For example, debt asset is when an investor extends a loan to the owner of asset and the equity based asset reflects the ownership of the investor. What Does It Mean To A Retail Investor? The categorized forex asset class is a wise investment opportunity for a retailer. You can systematically acquire and hold a foreign currency, such as euro or pound sterling till it appreciates sufficiently over time. Speculative forex trading is another avenue but it is ridden with significant risk factors.

Transnational executives hold a considerable amount of forex in their kitty.

Jason Uvios writes about "Forex As an Asset Class and Financial Instrument" to visit: foreign pharmacy, foreign currency and foreign currency exchange rates.



Business Management






New York real estate - New York real estate New York City is the financial capital of the world.

What you Should Know about Foreign Property Ownership In Puerto Vallarta - If you are looking for overseas property Puerto Vallartais a great option.

Costa rica News - Here you will come to know what you want to know about Costa Rica real estate.

The Rags To Riches Story Of Dean Graziosi - Dean Graziozi, best-selling author and infomercial guru knows exactly what it is like to live on both sides of the money spectrum.

Home Selling Checklist - It's not an easy job to selling a house.

more...

© Copyright Louisallenassoc.com All rights reserved.
Unauthorized duplication in part or whole strictly prohibited by international copyright law.