Help with something please

Kastro_316

Kastro_316

My economics teacher was telling us today about people who trade money markets....Can anyone give a site, or tell me about this? I would love to learn about this....He said, they would buy money in one market, and sell it in a different market or something...Sorry if this might not make any sence lol
 
There are several possibilities here: the most likely is that your teacher is speaking in very general terms since he doesn't really understand the mechanics of how currency is traded.

There are a few ways to trade currencies. For the average bloke the easiest way is to open an account with a forex broker (several advertise on ET) and begin. In this case you will be trading currency pairs in the "spot market". By pairs I mean that you aren't trading just one currency, you are trading that currency in relation to another currency. For example, if I think the US $ will rise I can go to my bank an buy US$. Since I live in Japan I am spending Yen to by dollars. In effect I am saying that I think the US$ will rise in RELATION to the yen.
Going to the bank works well on a mini scale, but if you want to leverage your money (buy more $ than you actually own in equivalent yen) then you need to go through a broker. The advantages and pitfalls of leverage are a whole different thread.

Hope this helps. If I made any mistakes, someone please point them out to me.
 
Ya, sounds like he was talking about an arbitrage play.

Here's a simple definition:..."Buying a security or commodity in one market and simultaneously selling the same or related instrument in another market in an attempt to profit from short-term price differentials."
 
Quote from Kastro_316:

My economics teacher was telling us today about people who trade money markets....Can anyone give a site, or tell me about this? I would love to learn about this....He said, they would buy money in one market, and sell it in a different market or something...Sorry if this might not make any sence lol
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May want to ask him if he is talking about "Forex." If so I may be able to help you.
 
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