The Mystery Of Foreign Exchange Charges: Margin Trading, Such As Bet &Nbsp; Cash Cost 3.6%

ICBC, China Merchants Bank, China Construction Bank and other banks have reported to the financial weekly that they do not charge fees in foreign exchange pactions, and the paction cost of cash paction is 3.6%.

This is known as the "gambling market". People here like to stimulate; there is a sense of short-term cash making and a bleak night bankruptcy; here is the foreign exchange market, which is the most risky place.

From the bad cash pactions to the turbulent trading, and to the thrilling margin trading, the foreign exchange market is not only risky but also costly.

Unlike other pactions, there is no specific and fixed exchange in foreign exchange pactions. The impact of supply and demand on paction prices is not as obvious as that in other pactions. It is carried out through electronic networks between banks, enterprises and individuals, and you do not even know who your counterparty is.

Puzzle of foreign exchange paction fee

In foreign exchange pactions, banks and other financial institutions, like enterprises or individuals, carry out foreign exchange pactions according to the exchange rate. However, because banks have the advantage of platform, the pricing power of pactions is in the hands of banks.

Financial weekly newspaper reporter to electricians, China Merchants Bank, China Construction Bank and other banks, these banks have indicated that the bank's foreign exchange pactions do not charge fees.

In foreign exchange pactions, banks claim to be free of charges, but because banks have pricing advantages, banks always sell higher prices than buying. This is actually a disguised fee.

Generally speaking, the price of foreign exchange pactions is based on the basic exchange rate (the middle price of foreign exchange), but when a business or an individual deals with a bank, the price given by the bank will have some difference from the benchmark interest rate.

When investors exchange money in a bank, the banks will give five prices of remittance, cash purchase, selling price, base price and converted price every day, and there are differences between the five paction prices.

"Foreign currency cash can only be used abroad, carrying and pporting cash needs cost, so the purchase price of spot exchange is generally higher than the buying price of cash. The conversion price is the reflection of the overall situation of foreign exchange pactions of banks, and has little to do with traders."

A joint-stock bank foreign exchange trader told the financial weekly newspaper reporter.

Transaction charges are very high.

Foreign travel, foreign trade, must first be converted into foreign currency, which is cash pactions.

Compared with other investment pactions, the biggest function of cash pactions is practical rather than investment, so the spot trading is relatively high.

When calculating, the interest rate difference between the buying price, the selling price and the base price is the price difference charged by banks in foreign exchange pactions.

Because the difference is relatively small, for convenience of calculation, the difference between the exchange rate of buying and selling and the benchmark exchange rate is multiplied by 10000, that is, the difference.

If we travel to Europe, the euro will not be spent, and then it will be exchanged for RMB after returning home. The paction cost will be as high as 3.94%.

In the cash paction, the paction cost of each foreign currency is quite different. According to the above algorithm, the paction cost of euro to RMB is 3.6%, the US dollar and Hong Kong dollar are 1%, and the pound, Australian dollar and Canadian dollar are 3.6%.

The paction cost is the bank's handling fee (international settlement fee).

At the same time, different banks have different service charges.

Take the US dollar as an example, the conversion fee of ICBC and ABC is 1%, 1.5% of most banks, 1.75% of Shanghai Bank and 2% of Pudong Development Bank.

It is understood that the international currency settlement fee can be relieved by the consumption of dual currency credit card credit card consumption.

For example, in the United States, the RMB dollar dual currency credit card consumption issued by UnionPay can be refunded from the currency exchange fee when returning home.

The market is volatile.

Margin trading is like gambling.

In addition to cash pactions, the most common foreign exchange investment pactions are firm trading and margin trading.

Margin trading because of the amplification effect of leverage, investors can bet big, risk is infinitely enlarged, speculative elements heavier; so domestic margin trading in 2008, has been stopped by regulators.

At present, there are still a small number of underground security pactions in China, or through foreign countries, and domestic foreign exchange investment is mainly carried out through real trading.

Firm trading, also known as spot foreign exchange pactions, mainly convertibility of one foreign currency into another foreign currency through bank trading platform. The T+0 exchange method is adopted to obtain the exchange rate difference profit through the appreciation of foreign currency.

At present, many banks in China have firm trading pactions, such as the deep development of "win win", foreign exchange trading of personal entities, the "small settlement sale" of ICBC, and the personal sale of foreign exchange by the merchants bank.

"The difference in the volume of trading is relatively low, and the US dollar is generally 10-20 points (converted to a paction cost of about 0.2 per thousand), but the foreign exchange market is more volatile and risky."

The joint-stock bank foreign exchange trading clerk told the financial weekly newspaper reporter.

Since 2006, people's livelihood, Bank of communications and Bank of China have launched margin foreign exchange pactions, also known as spot foreign exchange contracts.

Domestic leverage is generally around 20 times, and people's livelihood is 30 times. Foreign exchange margin trading is more stimulating and the highest leverage ratio is 200 times.

In addition to the increase in leverage with the leverage ratio, margin trading also involves interest rate payment, that is, using foreign currencies with lower interest rates to buy foreign currencies with higher interest rates, interest payments are required, whereas interest is charged while interest rates are enlarged at the same time.

"In order to hedge risk, a margin trading usually buys another reverse direction foreign currency option, and a margin trading option when buying margin trading, and vice versa.

This foreign currency option is generally cheaper and can be selected for execution or not at maturity.

Mr. Zhang, who has been investing in foreign currencies for many years, told the financial weekly newspaper reporter.

It is understood that Zhang said the foreign exchange option business, at present, the merchants bank has.

"The amount of an option contract is usually 100 dollars, with a period of 3 months or 6 months, and the minimum price is only 1 dollars," the relevant staff of the China Merchants Bank said to the financial weekly newspaper reporter.

Margin trading is so risky that it is almost a gambling paction.

Therefore, after June 2008, the CBRC halted the domestic foreign exchange margin trading.

Domestic foreign exchange margin trading can only be done through underground channels or through foreign trading platforms.