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
it doesn't make sense and your teacher seems like a dunce. Well, I guess that's why he's there teaching economics. 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."
Try www.oanda.com . They have quite a lot of information and the account size is so small that even a student might fund one Kiwi