Currency Trading Soars to $4 Trillion a Day

Posted Sep 1st 2010 1:20PM by Connie Madon
Filed under: Major Movement, International Markets, Market Matters, Money and Finance Today, Commodities, Currency

Are you looking for some real action? Then come here, my friend. Come to the $4 trillion dollar a day currency market.

The first question that comes to mind is: why is there so much trading in currencies? The answer is that investors are chasing places to put their money for big returns. With developing economies growing at breakneck speed, so too, are their currencies.

Let;s look these trends:

Currency trading has risen from $1,5 trillion per day in 1998 to $4 trillion in 2010.
The US dollar is the world's dominant currency, with 84.9% of transactions.
Trading volume in the Australian dollar has risen 35% since 2007.
The Canadian dollar was up 44%.

Banks traditionally are the biggest currency players. The landscape is changing now with the growth of ETFs in currency trading.

Regulators are getting worried. Currency trading offers extremely high leverage - 100 to 1. That means that you can invest $1 dollar and control $100. That's great when the trades are going with you. However, when they turn against you, you stand to lose gigantic sums of money. This is especially true for individual investors who may not have the bankroll to sustain big losses.

Would you invest in currencies?

Tags: currency trading, currency trading is a 4 trillion a day game, inthenews