e-Margin Trading

Foreign Exchange Market

The foreign exchange ("FX") market, unlike other financial markets, has no physical location or central exchange. It is a worldwide decentralised over-the-counter market which is open 24 hours a day, 5 days a week for market participants such as banks, other financial institutions, corporations, and institutional and individual investors to trade. As a result, it is the largest, most liquid market in the world with an average daily turnover of approximately $3.2 trillion, according to the BIS. (as of April 2007)

Characteristics of FX Market

Trading Hours
Other financial markets' trading hours are dictated by the market hours of the exchanges and time zone which they are located, whereas the FX market is open 24 hours a day, 5 days a week, making it a liquid market throughout the day. Therefore, traders will always have a choice of when to enter or exit the market. Furthermore, individual investors in Asia who usually may not be able to trade during their working hours will have a chance to trade after work, which are the hours when the US and UK markets are open and the greatest trading volume and liquidity is seen.

Liquidity
The FX market is the world's most liquid market, giving investors the confidence to know that market activities remain constant and there are much fewer price gaps and erratic spikes as seen in lower-volume markets.

Lower Transaction Cost
Trades on the FX market are free from a variety of fees,such as administrative fees, clearing fees, exchange fees and government fees. Only a commission is charged on per trade basis.

No Restrictions on Short Selling While stock markets have restrictions on short sellings (placing a sell order when you think the market is bearish without the underlying) and investors can mostly only profit in rising market, the FX market does not have such restrictions and provide investors the opportunities to profit from both rising and falling markets.

Transparent Market
The best characteristic of the FX market is probably closest to the ideal fair market, notwithstanding occasional market interventions by some central banks. In the FX market, the vast volume and liquidity virtually make it impossible for even the biggest players to interfere with the general trend in the market.

FX Leveraged Margin Trading

Characteristics of Leveraged Trading

Although the FX market is an attractive place to trade FX, as with any other financial products, the initial investment can be relatively high to begin with. However, leveraged margin trading available in the FX market enables investors to increase the size of their positions by putting up a small percentage of the full value of the positions. With leverage, investors have the freedom to control a large position while utilising less capital to trade.

[Example] A buy order of 100,000 USDJPY at an exchange rate of 90.50. Without Leverage USD $100,000 is required. UOB FX Margin Trading Account Initial margin of USD $5,000 is all you need. (100,000 × 5% =5,000) (subject to a minimum deposit of SGD $30,000)

e-Trading with FXLT

Below are product specifications for an e-Trading Foreign Exchange Margin Account. Our user-friendly online trading system FXLT, provides you with a competitive rates in the market for 24 hours a day, 5days a week to trade your way.

Trading foreign exchange on margin carries a high level of risk, including the loss of the principal amount and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.