Markets For Retail Day Traders
Previously seen as a niche market, or something for institutional speculators, the forex market, by 2010 had increased exponentially to an average daily volume of about $4 Trillion, with spot retail trades now accounting for an estimated 10% of that volume. Possible reasons for the surge in retail forex is the now high margin requirements in individual U.S. equities (stocks) for day traders imposed after 2001 and apparent overt manipulation of commodities markets making the 'rigged' commodity futures markets a less desirable or 'fair' market in which to participate. However exchange-traded funds (ETFs) have gained rapidly in popularity, being seen as a less expensive way to trade all futures markets as well as some more exotic markets not otherwise available to retail day traders.
The amount of margin required by most retail forex brokers in contrast is negligible. With full size lots (100,000 units of currency), mini-lots (10,000) and even micro-lots (1,000) all with up to as much as 1000:1 leverage being available (although not in the US where the maximum is now 50:1 after a ruling by the CFTC), means a retail day trader could in theory trade a single micro-lot of USD for the cost of $1. Realistically most brokers require a minimum deposit of $500. The sheer volume of the FX market makes it a difficult one to manipulate in any meaningful way, even with the money available to large proprietary and institutional trading interests.
Read more about this topic: Day Trader
Famous quotes containing the words markets, retail and/or day:
“When the great markets by the sea shut fast
All that calm Sunday that goes on and on:
When even lovers find their peace at last,
And Earth is but a star, that once had shone.”
—James Elroy Flecker (1884–1919)
“A free-enterprise economy depends only on markets, and according to the most advanced mathematical macroeconomic theory, markets depend only on moods: specifically, the mood of the men in the pinstripes, also known as the Boys on the Street. When the Boys are in a good mood, the market thrives; when they get scared or sullen, it is time for each one of us to look into the retail apple business.”
—Barbara Ehrenreich (b. 1941)
“I don’t know what it is about fecundity that so appalls. I suppose it is the teeming evidence that birth and growth, which we value, are ubiquitous and blind, that life itself is so astonishingly cheap, that nature is as careless as it is bountiful, and that with extravagance goes a crushing waste that will one day include our own cheap lives.”
—Annie Dillard (b. 1945)